Rental growth slowing across the UK, latest index shows

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Average rents across the UK rose by 0.7% in November when compared to the same month a year ago, taking the average monthly rent to £904, the latest index shows.

Overall rental growth is slowing and has lagged behind the general rate if inflation as measured by the consumer price index since December 2016, according to the date from the HomeLet rental index.

But the national data masks significant regional variations. It also shows that rents in London fell 0.2% in November year on year and the average monthly rent in the capital now stands at £1,530. Excluding London rents grew by 1.1%.

The East Midlands, Northern Ireland, the South West of England and the North East of England all recorded annual rental price inflation in excess of 3% during November. But as well as London, the East of England and the South East of England saw rents fall.

On a monthly basis, comparing November to October, average rents fell in 10 out of 12 regions of the UK last month, with only the South West and the North East in positive territory.

The data also shows that last month’s 0.7% rate of annual rental price inflation compares to an average of 2.8% in November 2016, some four times’ higher.

‘So far this year we have seen very modest rental price inflation. Rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we last saw during the first half of 2016,’ said HomeLet’s chief executive officer, Martin Totty.

‘HomeLet’s monthly data continues to support a picture of modest increases in rents over 2017 and, in most instances, a reduction in real terms against the backdrop of underlying higher inflation,’ he added.

A breakdown of the figures show that the largest annual growth in rents was in the East Midlands with a rise of 4.4% to an average of £615 but month on month rents were down 0.5%.

Rents increased by 3.3% in Northern Ireland year on year to £621 but fell by 0.6% month on month, were up 3.4% in the South West to £802 and also up 1.5% month on month while in the North East they increased 3.1% year on year and 0.9% month on month to £533.

In Wales rents increase by 1.8% year on year to £610 but were down 0.3% month on month while in Scotland they also increased by 1.8% on an annual basis to £620 while falling 0.2% month on month.

Rents increase by 1.4% year on year in the West Midlands to £675 but fell 1.2% month on month. In Yorkshire and Humberside they were up 1.3% year on year and own 0.6% month on month to £624 while in the North West rents climbed just 0.7% year on year to £685 and fell by 1% year on year.

In Greater London rents fell by 0.2% year on year and by 1.7% month on month to an average of £1,530. In the East of England they fell by 0.3% and 0.8% to £894 and in the South East rents fell by 1.9% on an annual basis and 0.1% month on month to £976.

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Written by: Houseladder