Rents on the rise again after recent falls, says HomeLet

Rents are gently rising again after some months of small dips according to HomeLet. 

It says the average new tenancy signed during July cost £925 compared to £915 in the same month of 2016.

July’s 1.1 per cent annual increase compares to declines of 0.3 per cent and 0.2 per cent in May and June respectively, the first time rents had fallen in the UK since 2009. 

But HomeLet says inflation in the private rental sector continues to lag behind the general rate of inflation, which was 2.7 per cent in June, the latest official data available.

The Greater London rental property market continues to act as a brake on the UK as a whole, with rents still falling there - an average of a 0.6 per cent drop over a year. 

July was the fourth successive month in which London saw rents fall, and while the pace of decline is now slowing – July’s figure compares to a 2.9 per cent drop in June – the capital’s rental market still looks transformed compared to this time last year, when rents were rising at a rate of 6.6 per cent.

Outside of London, rental price inflation is significantly stronger with nine out of 11 regions beyond the capital seeing higher rents last month. 

Rents rose fastest in Northern Ireland (up 5.7 per cent compared to July 2016) and Scotland (up 3.6 per cent), with only the South East (down 0.9 per cent) and the North East (down 1.7 per cent) recording declines. 

You can see the full regional picture in the infographic, below.

As a result, rental price inflation across the UK but excluding London is now running at a much faster rate of 1.6 per cent.

HomeLet says this data suggests landlords now feel more confident than in the spring about seeking higher rents on their properties – but also that they remain very aware of tenants’ ability to pay. 

The July data may also reflect a decrease in the number of homes coming onto the rental market, with research from organisations such as the Association of Residential Letting Agents suggesting fewer landlords have acquired new rental properties in recent months. 

“It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs. This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months” says HomeLet chief executive officer Martin Totty.