Rents up 2% in Britain but in real terms have fallen by 2.2% in last decade

Rents have fallen by 2.2% in real terms in Britain over the last decade with only London and the East of England recording rises over the pace of inflation, the latest monthly lettings index shows.

They have increased by 7.5% since October 2008 in the East of England and by 0.5% in London, according to the Hamptons International index.

It also shows that rents for new properties coming to the market increased by 2% in October 2018, the highest level since February with every region recording a rise in rents.

Over the last 10 years inflation, which measures the average cost of goods and services (or the cost of living, has outpaced rents. In the decade rents have risen 22%, but inflation has risen 24% over the same period.

The Midlands has seen the biggest fall in real rents, down 7.8% since October 2008, while real rents in the North have fallen 6.9% as inflation has outpaced rental growth.

The average new let in Britain rose to £977 per calendar month and the East of England saw the biggest increase in rents, up 3.9% year on year, while Scotland saw the slowest rental growth at 1.1%. Meanwhile rents in London grew for the second consecutive month, up 1.4% year on year.

‘Real rents in Britain have been falling for the last 21 consecutive months. This comes as a result of sluggish rental growth and a post-EU referendum backdrop of rising inflation,’ said Aneisha Beveridge, head of research at Hamptons International.

However, this could be set to change as inflation begins to fade and rental growth starts to pick up pace. Currently the East and London are the only regions where real rents have risen over the last decade,’ she added.

A breakdown of the figures show that rents in the East of England rose by 3.9% year on year to £965, in Greater London they increased by 1.4% to £1,714, in Outer London they increased by 1% to £1,543, and in Inner London they increased by 2.7% to £2,614.

In the Midlands they increased by 1.4% to £687, in the North of England by 1.9% to £648, in Scotland by 1.1% to £660, in the South West by 2.2% to £808, in the South East by 2.8% to £1,049, in Wales by 2% to £671, and in Yorkshire and Humber by 1.6% to £679.