Private sector rents in the UK are continuing to fall with the latest data showing that they fell by 0.3% in June compared to the same month a year ago.
It is the second month in a row in which rents fell, taking the average monthly rent to £908, according to the figures from the HomeLet rental index.
Rent fell month on month in a number of regions while Scotland saw the biggest rise at 2.3%, while rent were also up by 1.7% in the South East, by 1.5% in Greater London, and by 1.4% in the North West.
However, the index saw rents fall month on month in some regions, although only marginally with a drop of 0.4% in the South West and the East of England and a fall of 0.1% in the East Midlands.
Year on year rents fell in five regions, down 3.1% in the North East, down 2.6% in London, down by 0.9% in Yorkshire and Humberside, down 0.2% in the South East and down 0.1% in the East of England.
Compared to a year ago rents increased by 3.5% in Northern Ireland, by 2.8% in the East Midlands, by 2.5% in Wales, by 2% in the North West and by 1.9% in Scotland.
Overall, June’s decline mirrors the 0.3% fall seen in May, the first annual fall in rents recorded since December 2009. The average rent agreed on a new tenancy during June was £908, down from £910 in the same month of 2016.
The London rental market continues to act as the driver on average rents across the country, according to the index report, with a 2.6% decline in the average rent agreed on a new tenancy in the city last month.
Rents in London have fallen on an annual basis for three months in a row, having risen more quickly than anywhere else in the country during the first half of last year and rental price inflation in London peaked at 7.1% in June 2016.
HomeLet’s data suggests that landlords are reluctant to charge higher rents in the current uncertain economic climate. While demand for private rental property remains high relative to supply, landlords continue to be conscious of affordability issues for tenants.
UK rental price inflation has now been declining for 12 months, since June 2016. At the time, rents were up 4.5% on an annual basis, but since then the rate of growth has dropped gradually each month to reach -0.3%. However, there is some evidence that the rental market is now stabilising with no change in the rate of decline between May and June.
‘It is now a full year since rental price inflation in the UK peaked at 4.7%, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country,’ said HomeLet’s chief executive officer, Martin Totty.
‘June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty. The next few months of data from the HomeLet index will provide crucial intelligence on the direction the market is taking,’ he added.
