Rents in the UK rose by an average of 2.4% during August, new data from HomeLet reveals
The figures represent the highest rate of annual growth seen in the Private Rented Sector this year.
Average rent agreed on a new tenancy signed last month was £939 according to the August HomeLet Rental Index, compared to £916 in the same month of 2016.
August’s increase in average rents was partly driven by a return to inflation in the London market, where rents agreed on new tenancies last month were 2.4% higher than in August 2016.
Last month’s increase took the average rent in the capital to £1,609 – the first-time rents in London have been above £1,600.
Excluding London, rental price inflation has also picked up, with 10 out of the 11 remaining regions beyond the capital seeing rents increasing last month. The average rent on a new tenancy outside London was £776, up 2.3% compared to the same period in 2016.
Rents rose fastest in the South West of England (up 3.9% compared to August 2016) and Northern Ireland (3.7%), with only the South East (-0.2%) recording a decline.
HomeLet CEO, Martin Totty, said: “Whilst we’ve often observed a seasonal uplift in average rents at this time of year, there’s evidence of a trend now emerging which points to a reversal of the declines seen over the early part of this year.
“This will be welcome relief to landlords who have been battered by the perfect storm of tax changes and post-Brexit uncertainties.
“Whether the trend continues or represents only temporary relief from the headwinds faced by property owners, the remaining months of 2017 should provide the answer.”
To Totty, it is hard to judge if the recent strengthening in rents achieved, seen generally across all regions of the country, is driven by more robust demand or by some restriction of supply.
“Either way, landlords will only be encouraged to invest in property over other assets if they’re convinced they can achieve reasonable returns.
“If not, then the supply of rental properties could become constrained.
“Many landlords still face further increases in their costs and so will need to find a new equilibrium between their legitimate required returns and affordability for tenants – it seems the elements in solving that particular equation become ever more complex,” he said.
Rental figures from the August 2017 HomeLet Rental Index
|Region||Average rent in August 2017||Average rent in July 2017||Average rent in August 2016||Monthly variation||Annual variation|
|South West||£838||£823||£805||1.8 %||3.9 %|
|Northern Ireland||£634||£625||£610||1.4 %||3.7 %|
|West Midlands||£693||£680||£670||1.9 %||3.3 %|
|East Midlands||£617||£620||£597||-0.5 %||3.2 %|
|North East||£538||£526||£524||2.3 %||2.7 %|
|East of England||£926||£919||£901||0.7 %||2.6 %|
|North West||£703||£698||£685||0.8 %||2.6 %|
|Greater London||£1,609||£1,564||£1,569||2.9 %||2.5 %|
|Scotland||£629||£630||£616||-0.1 %||2.0 %|
|Wales||£626||£613||£615||2.1 %||1.8 %|
|Yorkshire & Humberside||£630||£625||£621||0.8 %||1.5 %|
|South East||£1,028||£1,025||£1,030||0.3 %||-0.2 %|
|UK||£939||£925||£916||1.5 %||2.4 %|
|UK excluding Greater London||£776||£769||£759||0.9 %||2.3 %|
|Based on new tenancies in August 2017||Based on new tenancies in July 2017||Based on new tenancies in August 2016||Comparison of average rent in August 2017 and July 2017||Comparison of average rent in August 2017 and August 2016|