Rents in UK down by 0.4% in November, latest index shows

Residential rents in the UK fell by 0.4% in November, taking the annual rate of increase from 3.9% to 2.9%, according to the latest index figures to be published.

The drop was led by London where rents fell by 0.6% month on month as part of the seasonal slowdown in monthly rent prices, according to the Landbay Rental Index.

This took the average monthly rent in the UK to £1,290 and November’s rent increases were fastest for one beds that are most popular with first jobbers and young professionals which were up 4% year on year. The data also shows that three bed properties, which are often rented by families moving for work, saw rents rise by 3.6%.

Overall, the index report points out that rents have been on a strong upward trajectory since early 2013 and have climbed 7% since January 2013 when they stood at £1,206, slightly ahead of wage growth which is up 4.8% since January 2013. The rental increase over this period has been led by rent rises for one bed flats, up 8.6% over the same period.

The November data also reveals that the South East dominates the areas with the fastest rental growth. York was the only area from outside the South East to feature in the top 10 rental risers.

According to John Goodall, chief executive officer of Landbay, London’s rental market is very sensitive to changes in supply and demand. ‘The November dip is likely to reflect softening tenant demand as new hiring slows in the run up to Christmas and fewer people move to the capital for work,’ he said.

‘On an annual basis rental inflation is tracking wage growth quite closely. Scotland was only part of the UK to see rental growth below 2%. The big picture is that we are in the midst of a housing crisis and that wages are rising and both these facts mean that rents are more likely than not to continue to climb next year,’ he explained.
‘With house prices rising at the same time it is little wonder that there is such a strong appetite for investments that are secured against British homes,’ he added.