- Rent price rises have slowed to match the pace of house price growth in the UK after 9 months of sustained faster growth
- Rent prices are now 8.5 per cent higher than a year ago, for the three months to September 2015, after six months of annual rises over 10 per cent
- The average rent in the UK for new tenancies over the three months to September 2015 is £995 per month
- The average rent for a new tenancy in Greater London now stands at £1,555 per month
- Rents drop in Greater London on a month-on-month basis for the first time since February 2015
- Deflation across the economy, and rising real incomes, mean the slowdown in rents could be temporary
After six months of annual rent price rises of 10 per cent or higher, the latest findings from the HomeLet Rental Index have shown rent prices have slowed below double figures to an average annual increase of 8.5 per cent across the UK. For the three months to September 2015, every region of the UK with the exception of the East Midlands has seen annual rent price rises slow down or move into negative growth.
The latest figures from the HomeLet Rental Index reveal that nine out of twelve UK regions are still seeing rent prices rise on an annual basis, with the largest increases seen in Scotland at 8.4 per cent, the East Midlands at 7.7 per cent and Greater London at 6.6 per cent. The figures also show three regions in negative annual price movement, with prices in the North West 4.6 per cent lower than a year ago, 2.2 per cent lower in East Anglia and 1.4 per cent lower in Northern Ireland.
Comparing September figures to the previous month, the Index reveals that only three regions have seen rent prices rise since August. In the three months to September 2015 only Scotland, the East Midlands and West Midlands have seen prices rise – by 1.2 per cent, 1.4 per cent and 1.4 per cent respectively.
Every other region of the UK has seen rent prices fall modestly in the three months to September 2015, with the largest price reductions seen in the South West, the North East and North West at -2.4 per cent, -2.3 per cent and -2.2 per cent respectively.
Rent price movement versus inflation and house price movement September 2015
(Source: HomeLet Rental Index, Consumer Price Index and Halifax House Price Index (seasonally adjusted))
Commenting on the report, Martin Totty, Barbon* Insurance Group’s Chief Executive Officer, said:
"The UK economy has dipped into 'negative inflation' which is a boost to consumers' spending power and, ultimately, their real income. Affordability is an important factor in determining rents. Depending on what happens with inflation and real incomes over the coming months, could have a bearing on future rental price trends especially where, in certain areas of the country, the supply of rental properties is not keeping pace with demand from those wishing to be private sector renters.”
HomeLet Rental Index regional rent price figures for the three months to September 2015
HomeLet Rental Index Regional Variance Figures for the three months to end–September 2015
About the HomeLet Rental Index data
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 around 350,000 prospective tenants each year, HomeLet processes information including 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 brand 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 which are being managed, which may have had rental amounts agreed as long as two years ago.