Rents fell 1.5% last month but are likely to rise again in the New Year so this month is the optimum time of the year for potential renters to find a new property, according to the latest review from FindaProperty.com.
Monthly rents dipped in November for the fourth consecutive year, bringing the average asking price per month down to £871. Since 2008, rental prices have experienced a temporary lull in the final two months of the year, before rebounding to new heights in the Spring.
Rental asking prices rose consecutively for the first nine months of this year, peaking in September at £890, equivalent to half the average household’s net earnings per month.
Against a backdrop of a booming rental market in 2011, in which asking prices reached new heights of £890, FindaProperty believes rents are likely to rise again in 2012 in line with seasonal trends, making December the optimum time for new tenants to secure favourable prices.
While UK rental prices fell 1.5% last month, the East Midlands’ rental market recorded the biggest average reduction of 4.8%. In contrast, properties in Wales have proved somewhat immune to the slowdown, with prices rising 1.3% in November.
‘Demand for rental properties has boosted prices this year, forcing many households to spend significant proportions of their income on accommodation. This temporary dip in asking prices won’t last long, and it’s a great opportunity for potential tenants to agree a rate that’s favourable in comparison to the rest of the year,’ said Samantha Baden, property analyst at FindaProperty.
‘Over the past couple of years rental prices have picked up very quickly after the December lull, so our advice to potential buyers is to act fast to take advantage of this seasonal dip,’ she added.
The monthly review also shows average asking prices for UK properties decreased by 0.5% (£1,150) last month to £218,385. Prices are still 0.7% (£1,429) higher than a year ago.
London was the only region to experience price inflation last month, with asking prices rising 0.7% (£3372) bringing the average price of a London home to £453,956.
Properties in Scotland experienced the greatest decline, with asking prices falling from £151,758 to £149,596, or down 1.4% while asking prices for first-time buyer properties fell by 0.4% in November and are now £152,989, some £538 less than in October which was the sixth consecutive monthly decline.
In spite of this, affordability for first time buyers deteriorated slightly this month as a result of a lower income multiple offered by mortgage lenders. The average first time buyer in November has to find a deposit of £49,492 on average, £710 more than in October.
Asking prices for houses fell by 0.6% to stand at £239,778, a decrease of £1,433. Prices for flats decreased slightly less, by 0.3% or £569, to £174,262. On an annual basis, prices for houses are 0.5% higher than November 2010, while flats are 1.1% higher.
Asking prices for larger family homes fell faster than any other property type, with 5+ plus bedroom houses dropping by 1.3% or £6,861 to £540,957.
The average asking price for studios and one bedroom flats fell by 0.6% to £128,918 and are now at their lowest point since August 2009. Prices for two bedroom flats fell slightly faster, by 0.4% to stand at £176,119. But three plus bedroom flats bucked this trend, increasing by 0.2% to £313,940 and are at their highest point since February 2008.
Property availability fell sharply in November, by 5%. This follows the seasonal trend of stock levels decreasing towards the end of the year before increasing again in January.
