Residential rental growth is slowing in the UK with the average rent up by just 0.05% in October, down from the 0.09% recorded the previous month, the latest index data shows.
Growth was slowed in particular by a 0.11% fall in rents in London while when the city is excluded the growth was 0.14% in the rest of the UK and 0.15% in England, according to the Landbay rental index.
However, the overall fall in London rents masks a tale of two cities. Four London boroughs have seen rents fall over the past year with Westminster down by 1.86%, Kensington and Chelsea down by 1.81%, Richmond upon Thames down by 0.99% and Camden down 0.93% but Bexley is up 3.12% and Barking and Dagenham up 3.02% and 14 London boroughs have growth ahead of the UK average of 1.49%.
The data also shows that the average UK rent is now £1,188, with London’s average at £1,889, and the rest of the UK being £748 per month.
Hotspots for rental growth over the last 12 months include Luton with growth of 7.11%, Edinburgh up 5.63% and Northamptonshire up 5.59%.
At the opposite end Aberdeen has seen rents fall by 13.22% and Aberdeenshire by 9.03% with both markets affected by the fall in oil prices since the middle of 2014. Other areas where rents are falling include Inverclyde with a decline of 2.39% and Dundee down by 0.87%, both in Scotland but overall Scotland has seen rents grow by 1.55% over the past 12 months, the fastest growth of all regions.
‘Rental growth is slowing across the UK, but the pace of change varies wildly between regions,’ said John Goodall, chief executive officer of Landbay, adding that falling rents in some of the most expensive parts of the country, especially prime London locations, can distort the picture for the rest of England and the UK where rents are continuing to grow at a steady pace.
‘Any moderation in rental price inflation will always be welcomed by generation rent, the swelling population of aspiring homeowners and long term tenants. As this month’s Autumn Statement comes over the horizon, all eyes will be on how the UK’s chronic housing shortage will be addressed. Unless supply catches up with demand, there’s nothing to suggest overall rents will go in any direction other than up,’ he pointed out.
