Residential rents across the UK grew by 1% over the last year to February 2017, the slowest annual rate of growth since April 2013, the latest index shows.
In London rents have fallen consecutively for the past nine months, down 0.53% over the last year, according to the latest Landbay rental index.
Indeed, the average rent paid by a London tenant is now £1,882, the lowest since September 2015 while outside the capital the average rent is £751. But the index report says that rising house prices, falling wages and inflation mean most tenants won’t feel the difference.
Average rents in the London boroughs of Kensington and Chelsea, Westminster and Camden have seen the most significant fall over the last 12 months, down by 3.5%, 2.23% and 1.79% respectively. In contrast, rents within the boroughs of Barking and Dagenham, Havering and Redbridge have grown by 2.88%, 2.64% and 2.08% as demand for properties in the outer boroughs of the city increases.
In the rest of the UK, while rents continued to rise, the speed at which they are growing lagged to 0.10% in February, the slowest monthly rate since February 2013.
Rents in England outside of London have seen the most substantial growth over the last year, up by 1.92%, while rents in Wales rose 1.37% and in Scotland they were up by 1.26%. Just Northern Ireland saw rental growth below the UK annual average of 1%, growing by 0.47% over the last 12 months.
‘While it may seem as though we are starting to see some much needed relief for renters, the cost of renting a property remains a huge burden for the 4.3 million people in the private rented sector across the UK, especially in London where average rents are significantly more expensive than the rest of the country,’ said John Goodall, chief executive officer of Landbay.
‘Although this could give the impression that the market is beginning to turn a corner, this is a situation that is unlikely to change in the foreseeable future. Demand for rented accommodation will remain robust over the coming months and years and continue to stoke up rental values, as rising house prices, falling wages and rising inflation dampen the ability of aspiring homeowners to save for a property of their own,’ he pointed out.
‘Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, people rely on a well-served buy to let market to ensure rental growth doesn’t become unbearable,’ he explained.
‘The Chancellor’s decision not to raise the stamp duty threshold in this month’s Budget was yet another blow for first time buyers, so it’s important that we now see some clear follow through to the promises made in the housing white paper to ease at least some of the pressure on Generation Rent,’ he added.
