Annual rents fall for first time in six years
The average rent in the UK in February was £921 per month, £5 less than February 2016, according to the latest Countrywide Lettings Index. This saw the first drop in annual rents since November 2010, with rents falling by 0.6% over the last year. However, rents are still 14% higher than their previous peak in 2007.
The average national rent was dragged down by London and the South East where rents had fallen by 4.7% and 2.6%. In all other regions of the UK rents rose by 0.8% albeit at a slower rate than the previous month. The East and West Midlands were the only UK counties to record a faster growth in February compared to January this year.
The fall in the average rental growth was also driven by the decline in tenant demand in London and the South East despite there being an increase in the number of tenants looking for rental property in other regions of the UK.
The number of rental properties available rose by 10% in February this year with London, the South East, the South West and the East of England all recording double figure growth in the number of homes available to rent. However, this increase in supply coupled with a decline in tenant demand, is likely to limit rental growth over next few months.
Research Director at Countrywide, Johnny Morris, said: “Rents are growing in most of the country but falls in London and the South East are dragging down the national growth rate. Recent falls in London and the South East are small in the context growth in recent years. Rents are a third higher in London and the South East than in 2007.
Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south. While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth.”
Full article available on Property Reporter: http://www.propertyreporter.co.uk/landlords/rent-sees-first-annual-fall-in-six-years.html