Plus rent slow across the UK according to Countrywide
Rental growth has slowed across the country. And while rents still went up in most regions, last month there were drops in the south-east, Scotland, Wales and London.
According to Countrywide, it was the first drop in London for almost six years.
The last time rents in the capital recorded a year-on-year fall was in November 2010, when the average monthly rent in London was £923, 39% less than today. Across Great Britain, rents rose 1.5% year-on-year, the slowest rate of growth since 2012.
Rents on renewals also rose across most of the country, but dropped in the east of England, the north, and Scotland.
Countrywide also said that while tenant demand has increased nationally, the rise in the number of homes coming on to the rental market has slowed or in some cases reversed rental growth.
In July there were 23% more homes available to rent in the UK than at the same time last year, while the capital saw a rise of a third.
Some of this increase has been driven by purchases rushed through to beat the Stamp Duty deadline but Countrywide said the number of homes available to rent has continued to rise in recent months, particularly in London and the south east.
An increase in the number of homes on the market has meant less deals are agreed above asking rents.
In July 2015 16% of tenants paid over the asking rent compared to 7% in July 2016. In London, 11% of homes let for more than the asking price in July, down from 32% in the same month last year.
In July the average newly agreed rent in the UK was £951 a month but this average figure includes a low of £671 in Wales and a high of £2,638 in central London.
Johnny Morris, director of research at Countrywide said: “The large rise in numbers of homes available to rent has certainly slowed rental growth, even with tenant numbers increasing.
“Stock levels were already running higher than usual due to investors bringing forward purchases in the rush to beat the Stamp Duty deadline in April.
“Added to that, uncertainty in the sales market in the run up to, and after the EU Referendum has caused more discretionary sellers to turn to the rental market.
“While rental price growth has slowed, current market dynamics are likely to accelerate the growth of renting.
“It seems that with more stock and demand from tenants we will see the number of households renting increase in 2016.”