Average advertised rents in London down for fourth quarter in a row

Residential rents in London have dropped 10% year on year while those in the South East of the UK are up, the latest rental index to be published shows.

Advertised rents in London have now fallen since the middle of last year. The index from Move with US shows rents in the capital down 4.9% in the third quarter third quarter of 2012, down 2.22% in the fourth quarter, down 1.69% in the first quarter of 2013 and down 0.85% in the second quarter of 2013.

In contrast, average advertised rents in the South East rose by £30 in the second quarter of 2013 reaching £1,147 per month, the highest rate seen in the region in the last 12 months. The South East saw an average increase of 2.71% in the second quarter as asking rents recovered from a slight fall in April.

Overall average asking rents in the UK remain stable at £967 per month in the second quarter of 2013. In the past 12 months they have continued to follow a consistent pattern fluctuating around the £965 mark with increases and decreases either way of no more than £4. Unchanged economic conditions have meant that advertised rents have stabilised and there is no indication of any drastic change during the second half of 2013.

‘It’s interesting to see that rents in London have fallen in a year on year comparison. We can see from our data that is more than just a hangover from the Olympics as the downwards trend has continued long after demand and average asking rents were artificially raised by London 2012,’ said Robin King, Move with Us director.

‘Overall however, rental demand across the country remains steady and supply is growing in line with that demand. Estate agents in our partner network have also reported that in the second quarter of 2013 they noticed less than 5% arrears as tenants are being properly referenced and tend to be less likely to fall into financial difficulties,’ he added.

Asking rents in the North typically fell again in the second quarter of 2013, levelling out the increases seen in 2012. The South of England remains much stronger than the rest of the country with a £112 gap between the cheapest southern region and the most expensive of all other regions.

At the other end of the spectrum, Yorkshire and Humber has been the worst performing region, with asking rents dropping to £603 after an upward growth path. Asking advertised rents in the region are now the lowest in the country.

Average advertising rents in Greater London unsurprisingly continue to outperform the rest of the country but were down 0.85% in the second quarter to £2,162, some 10% lower when compared to the same period last year.

The South East saw an increase in average advertised rents in the second quarter of 2013, rising by £30 to £1,147 per month, an average increase of 2.71%. After six months of small fluctuations, advertised rents are now at the highest they have been in the last 12 months. May and June offset the slight fall in advertised rents that we saw in April as they rose by £35 from £1,110 to over £1,145 in just an eight week period.

The second quarter of 2013 saw yet another period of steady decline in the South West region with average advertised rents down by 1.19% to £790 per month. This is equivalent to a fall of £9 when measured against the average of the first three months.

Continued growth and a sharp upturn during December of 2012 indicated that advertised rents in this region would continue to improve this year. Instead they have gone against expectation reporting a gradual downward turn. Any future declines are unlikely to be any greater than those witnessed to date, the firm says.

Average advertised rents in East Anglia increased by £11 from the first quarter, reaching £892 per month in the second quarter, a rise of 1.25% since the beginning of the year. This was not as significant as the growth seen in the first three months of the year but after a particularly slow Christmas period and its effect on the region’s advertised rents, the first quarter saw a correction with an average of £880 per month.
 
The significant growth of over £50 seen at the end of the fourth quarter of 2012 in the East Midlands has now been offset by two successive periods of reductions in both the first and second quarter of the year which saw advertised rents levelling out at £622 per month.

However, average advertised rents are still up on the previous 12 months by £36 which is an early indication that asking rents are likely to fall below £600 per month in the not too distant future.

Looking at the past 12 months, any fluctuation in advertised rental prices for the West Midlands would at first glance appear to vary dramatically. However, these deviations have been minimal and remain contained within a range of £10, a trend that continued throughout the second quarter of this year.
 
Average asking rents rose by only 0.25% to £656 per month. There are no indications that advertised rents will deviate too far from the £655 average per month over the next quarter as they appear to have reached equilibrium. The West Midlands appears to be the most stable region in Great Britain in terms of asking rent fluctuation.

In Yorkshire & Humber advertised rents fell by more than £23 or 4.11% in the second quarter of 2012, making this the lowest performing region over the three month period. However, as is the case with the majority of Britain, advertised rents remain up on last year suggesting that the second half of the year will be the real determinant as to how rents in the region are performing. The average advertised rent at present is £603 per month, which is an increase of £44 from the same period in 2012
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Advertised rents in the North East have returned to levels more akin to the earlier part of 2012 following an unusual peak to over £740 per month in May and a subsequent decline to an average of £668 per month in June. Advertised rents initially appeared to be climbing again in the second quarter of 2013 as both April and May saw a combined growth of £20 before a slight downturn in June levelled the figure to an average of £668 per month.

The increase in advertised rents seen in 2012 has been undone somewhat in the North West. After six months of successive decline, average advertised rents settled at £633 per month in Q2, 1.99% down on the first period of the year. A decline in asking rents of £11 in April, followed by two months of a more level change have left the North West £12 down on the first quarter.

Advertised rents have risen by 3.8% since the same time in 2012 and despite the steady rate at which advertised rents have fallen this year, it is unlikely they will return to the low rates of 12 months ago during the next three months.

Advertised rents in Wales fell by £20 in the second quarter of 2013 to an average of £636 per month. Despite this drop of 3.2%, advertised rents remain above those of last year due to a strong second half of 2012 which saw them grow by approximately £80 in six months. Advertised rents in the region have tailed off somewhat since the Christmas period and now seem to have stabilised.

The second quarter of 2013 saw average advertising rents in Scotland remain stable, reaching an average of £678, a mere 0.1% up on the last period. Advertised rents rose £30 in the second quarter when compared with the same time last year.