Some eight regions have seen increases of less than 1% in the last month, with an average increase in advertised rental prices of £5.79 per month. These areas have experienced stable growth and look to continue this for the foreseeable future, the report says.
The annual rate of advertised rent price inflation was 2.85%, giving a real increase of 0.65%, taking into account 2.2% RPI inflation. Prices in the East Midlands, Yorkshire and Humber, and the North East, increased by over 3% in real terms.
Rental property looks to provide an effective hedge against inflation in the medium term, according to Robin King, director of Move with Us.
‘Rental asking prices remain relatively flat and we are unlikely to see significant increases now until the new year. People tend to change jobs and make new plans at this time, which is the key driver of demand for rental properties,’ he said.
London continues to see steady growth, increasing 0.99% in October. This trend now suggests that sustained growth is likely in the medium term. London remains the most expensive place to rent with average advertised rental prices now at £2,300 per month.
Advertised rents fell in East Anglia and Scotland, though they remain within 1.2% of last year’s prices. Asking rents in these regions have fluctuated around the same level for nearly two years, suggesting that this is a temporary condition. A return to price growth is expected in 2013.
Yorkshire and Humber appears to have peaked after accelerated growth throughout the third quarter of the year. Advertised rents fell by nearly 1% but this should be a temporary setback, with long term growth projected.
The North East is the surprise success of with price increases accelerating by 5.35%. This is the largest absolute price increase at £34 compared to the £22 per month increase in Greater London.However, house values in the North East are falling.
‘The North East is the star performer with advertised rents growing over 5% in October. Rental yields look set to improve as house values in the region fall,’ said King.
