UK rental price inflation falls for the first time in 8 years
According to the latest report from HomeLet, the average rent on a new tenancy commencing in May was 0.3% lower than the same month in 2016. Rents for new tenancies in London were 3% lower than this time last year.
This marks a landmark moment for the rental sector, as the first time since December 2009 that HomeLet Rental Index reported a fall in rents on an annual basis. The pace of rental price inflation across the UK has been slowing in recent months, having peaked at 4.7% last summer.
The North East of England, the South East, Yorkshire & Humberside, and Scotland all recorded a decline in rents on new tenancies during May, with falls ranging from 2.3% to 0.6%.
The fall in rental prices mirrors a similar picture in the housing market, with Nationwide recently revealing house prices had fallen for the third consecutive month.
HomeLet’s chief executive officer, Martin Totty, commented: “May 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”.
He added: “Tenants 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 we’ve now heard from all the main political parties, the UK’s population continues to grow.”
Full article available on PropertyReporter: http://www.propertyreporter.co.uk/landlords/uk-rents-fall-the-first-time-in-8-years.html