This is why
UK rental price inflation fell for the first time in almost eight years in May, new data from HomeLet reveals. The average rent on a new tenancy commencing in May was ยฃ901, 0.3 per cent lower than in the same month of 2016. New tenancies on rents in London were 3 per cent lower than this time last year.
Mayโs 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 per cent 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 per cent to 0.6 per cent. HomeLetโs 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.
The slowdown in the London market has seen average rents fall from ยฃ1,572 a month last July to ยฃ1,502 in May. Last monthโs 3.0 per cent annualised fall was the steepest decline seen in the capital since 2009.
HomeLetโs CEO, Martin Totty said: โMay 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.
โTenants 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 weโve now heard from all the main political parties, the UKโs population continues to grow.โ
Rental figures from the May 2017 HomeLet Rental Index
| Region | Average rent in May 2017 | Average rent in April 2017 | Average rent in May 2016 | Monthly variation | Annual variation |
| East Midlands | ยฃ614 | ย ยฃ604 | ย ยฃ595 | 1.6 per cent | 3.3 per cent |
| North West | ยฃ679 | ย ยฃ677 | ย ยฃ664 | 0.2 per cent | 2.2 per cent |
| South West | ยฃ803 | ย ยฃ802 | ย ยฃ787 | 0.2 per cent | 2.1 per cent |
| Wales | ยฃ605 | ย ยฃ610 | ย ยฃ594 | -0.8 per cent | 1.8 per cent |
| East of England | ยฃ909 | ย ยฃ904 | ย ยฃ904 | 0.5 per cent | 0.6 per cent |
| Northern Ireland | ยฃ609 | ย ยฃ614 | ย ยฃ606 | -0.9 per cent | 0.4 per cent |
| West Midlands | ยฃ658 | ย ยฃ661 | ย ยฃ656 | -0.5 per cent | 0.3 per cent |
| Yorkshire & Humberside | ยฃ614 | ย ยฃ619 | ย ยฃ618 | -0.7 per cent | -0.6 per cent |
| South East | ยฃ998 | ย ยฃ1,003 | ย ยฃ1,014 | -0.4 per cent | -1.5 per cent |
| Scotland | ยฃ622 | ย ยฃ632 | ย ยฃ634 | -1.6 per cent | -1.9 per cent |
| North East | ยฃ522 | ย ยฃ525 | ย ยฃ534 | -0.7 per cent | -2.3 per cent |
| Greater London | ยฃ1,502 | ย ยฃ1,519 | ย ยฃ1,548 | -1.1 per cent | -3.0 per cent |
| UK | ยฃ901 | ย ยฃ904 | ย ยฃ904 | -0.3 per cent | -0.3 per cent |
| UK excluding Greater London | ยฃ753 | ย ยฃ754 | ย ยฃ750 | -0.1 per cent | 0.5 per cent |
| Notes: | Based on new tenancies in May 2017 | Based on new tenancies in April 2017 | Based on new tenancies in May 2016 | Comparison of average rent in May 2017 and April 2017 | Comparison of average rent in May 2017 and May 2016 |
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HomeLet rental index regional variance figures for May 2017
Source: HomeLet
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