Rents in UK down year on year for first time since 2009
Residential rents fell in five out of 12 regions in the UK in May compared to the same month a year ago, the first such fall since December 2009, and month on month they were down across most of the nation.
Overall rents were down by 0.3%, taking the average monthly rent to £901 while new tenancies in London were three times lower than this time last year, according to the data from the HomeLet index.
The index report says that May’s decrease in average rental values marks a significant moment for the rented property sector as it is the first fall for eight years but is not a major surprise as the pace of rental price inflation across the UK has been slowing in recent months, having peaked at 4.7% last summer.
The slowdown in the London market has seen average rents fall from £1,572 a month last July to £1,502 in May. Last month’s 3% annualised fall was the steepest decline seen in the capital since 2009.
In addition to the fall in rents in London, four other regions of the UK saw rents on new tenancies decline during May year on year. Rents were down by 0.6% in Yorkshire and Humberside, by 1.5% in the South East, by 1.9% in Scotland and by 2.3% in the North East.
Month on month the fall is more widespread. Rents were down 0.4% in the South East, down by 0.5% in the West Midlands, by 0.7% in Yorkshire and Humberside and the North East, by 0.8% in Wales, by 0.9% in Northern Ireland, by 1.1% in Greater London and by 1.6% in Scotland.
The slowdown in the rental sector mirrors a similar picture elsewhere in the housing market, with Nationwide Building Society revealing in June that house prices had fallen in each of the past three months.
‘The data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs,’ said Martin totty, HomeLet’s chief executive officer.
‘Tenants will still need a vibrant and growing rented sector to provide them with property options at the time of their choosing. Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow,’ he added.