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UK rents continue to fall, June HomeLet Rental Index reveals

Posted on 2017-07-04

  • Rents in the UK fell by 0.3% in June compared to the same month a year ago, the second month in row in which rents fell; the average monthly rent now stands at £908
  • Rents in London fell by 2.6% in June this year compared to June 2016; the average monthly rent in the capital now stands at £1,524
  • HomeLet’s June Rental Index reveals that rents fell in five of the 12 UK regions covered in the research

New data from HomeLet reveals that UK rental prices fell by 0.3% when compared to last year, the second successive month in which rents showed a decline. June’s decline mirrors the 0.3% fall seen in May; the first annual fall in rents recorded since December 2009. The average rent agreed on a new tenancy during June was £908, down from £910 in the same month of 2016.

The London rental market continues to act as the driver on average rents across the country, with a 2.6% decline in the average rent agreed on a new tenancy in the city last month. Rents in the capital have fallen on an annual basis for three months in a row, having risen more quickly than anywhere else in the country during the first half of last year; rental price inflation in London peaked at 7.1% in June 2016.

In the face of this, HomeLet’s data suggests that landlords are reluctant to charge higher rents in the current uncertain economic climate. While demand for private rental property remains high relative to supply, landlords continue to be conscious of affordability issues to tenants. 

The annual variance in the UK rental values has been in decline for 12 months, since June 2016. At the time rents were up 4.5% on an annual basis, since then the rate of growth has dropped gradually each month to reach -0.3%. However, there is some evidence that the rental market is now stabilising with no change in the rate of decline between May and June.

HomeLet’s regional data is available in more detail via an online interactive infographic.

Commenting on the research, HomeLet’s Chief Executive Officer, Martin Totty said: “It is now a full year since rental price inflation in the UK peaked at 4.7%, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country; June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty – the next few months of data from the HomeLet Rental Index will provide crucial intelligence on the direction the market is taking.”

Rental figures from the June 2017 HomeLet Rental Index

The table below provides a regional breakdown of the latest average rental values in the UK. 

Region

Jun-17

May-17

Jun-16

Monthly Variance

Annual Variance

Northern Ireland

£610

£609

£589

0.3%

3.5%

East Midlands

£614

£614

£597

-0.1%

2.8%

Wales

£608

£605

£592

0.4%

2.5%

North West

£688

£679

£674

1.4%

2.0%

Scotland

£636

£622

£624

2.3%

1.9%

South West

£800

£803

£797

-0.4%

0.4%

West Midlands

£662

£658

£661

0.7%

0.2%

East of England

£906

£909

£907

-0.4%

-0.1%

South East

£1,015

£998

£1,017

1.7%

-0.2%

Yorkshire & Humberside

£615

£614

£621

0.2%

-0.9%

Greater London

£1,524

£1,502

£1,564

1.5%

-2.6%

North East

£525

£522

£541

0.6%

-3.1%

           

UK average

£908

£901

£910

0.7%

-0.3%

UK excluding Greater London

£757

£753

£753

0.5%

0.5%

 


About our data: The HomeLet Rental Index provides the most comprehensive and up to date data on new tenancies in the UK. As part of the referencing process for prospective tenants, HomeLet includes the rental amounts agreed, the number of tenants moving into the property, together with the employment status, income and age of all tenants. The trends reported within the HomeLet Rental Index are from new tenancies which were arranged in the most recent period, giving the most relevant insight into changes in the Private Rented Sector. This is in contrast to many other rental indices which are based on all properties being managed, which may have had rental amounts agreed as long as two years ago.

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