Annual rental prices up in 11 out of 12 UK regions

Residential rents rose year-on-year in 11 out of the 12 regions of Britain, with the most prominent rises in the South East of England and the East Midlands.

Overall, the typical rent in Britain, with the exception of Greater London, is now £740 per month. In London, average rents stand at £1,510 per month, according to the most recent rental index from HomeLet.

Slow progress

The data indicates that only the North West of England has seen a fall in rental prices over the last twelve months. Prices here fell by 3.4% from £646 per month to £624.

However, rent costs for new tenancies in Greater London are increasing at the slowest rate seen for nearly two years. The January index shows that Greater London prices are 6.2% higher for the three months to January 2016, in comparison to the same point in 2015. This is the least amount of growth seen in the capital since March 2014.

By contrast, rent prices in other regions continued to increase. The South East of England recorded rises in rent prices of 7.2% in the three months to January 2016. The East Midlands also saw a significant rise of 6.8% in rental prices in the same period.

Annual rental prices up in 11 out of 12 UK regions

Monthly differences

On the other hand, monthly data gives a different outlook. Rental prices in the UK, excluding Greater London, were 0.2% greater in the three months to January 2016, than in the three months to December 2015. In Greater London, rents have slipped by 0.9% over the same timeframe.

In all, six out of the twelve British regions recorded rises in rental prices during the three months to January 2016.

Martin Totty, chief executive officer of Homelet’s parent group, Barbon Insurance Group, said,’ it’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely.’[1]

‘The fact that UK wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact if the long term structural imbalance in supply and demand of property,’ he added.[1]

Concluding, Totty said, ‘landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents. With demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents.’[1]

[1] http://www.propertywire.com/news/europe/uk-rental-price-index-2016021011539.html