Thu 15 Jun 2017
UK rental price inflation fell for the first time in almost eight years in May, new data from our referencing partners at HomeLet reveal. The average rent on a new tenancy commencing in May was £901, 0.3% lower than in the same month of 2016. New tenancies on rents in London were 3% lower than this time last year.
May’s decrease in average rental values marks a significant moment for the rented property sector. This is the first time since December 2009 the HomeLet Rental Index has reported a fall in rents on an annualised basis. The pace of rental price inflation across the UK has been slowing in recent months, having peaked at 4.7% last summer.
In addition to the fall in rents in the capital, four other regions of the UK saw rents on new tenancies decline during May. The North-East of England, the South-East, Yorkshire & Humberside, and Scotland registered falls ranging from 2.3% to 0.6%. HomeLet’s regional data is available in more detail via an online interactive infographic.
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.
Despite the wider UK picture however, the East of England region does continue to grow, if only marginally. Average rents in this area in May 2017 (£909pcm) were 0.6% higher than in May 2016 (£904pcm).
Commenting on the research, our partners at HomeLet stated:
“May 2017 saw average rents nationally fall for the first time in eight years when the economy had suffered the shock of the financial crisis. HomeLet rental 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.
“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.”
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