December saw UK rents rose by an annual average of 1.7 per cent according to new research from HomeLet.
The rental market ended 2017 with a slight incline in rental price inflation, with the average rent agreed on a new tenancy signed in December reaching £907. This is up from £892 the same month the previous year.
During 2017, rental price inflation was relatively stable. In contrast, rents in 2016 frequently rose at an annual rate of over 4 per cent in the first half of the year, before stabilizing in the latter half. In December 2015, rents rose 3.7 per cent year on year, whilst rental price inflation never fell below 3.5 per cent.
December 2017’s data also suggests that it is likely that rents rose at a slower rate than general inflation in every month of last year. Inflation on the consumer price index measure ran at 3.1 per cent in November, the most recent period for which official statistics are available. Rents last rose more quickly than inflation in December 2016.
The East Midlands recorded the highest rate of rental price inflation last month, with rents up an average of 4.6 per cent in December 2017 in comparison to the same month in 2016. Rents in the East Midlands now stand at an average of £611 a month. This remains lower than most regions in the UK, excluding Wales and the North East. South-West, the North-East and Northern Ireland were the only other regions within which rental inflation exceeded 3 per cent.
By contrast, the South-East of England was the only region which saw rents decline last month, down 1 per cent year on year. Rents in Wales remained were completely flat last month.
London saw a 1 per cent increase in rents in December, marking positive rental inflation in comparison to December 2016 despite registering falling rents in five months of the year. The average tenancy agreed in London last month cost £1,524, up from £1,509 last year.
HomeLet’s Chief Executive Officer, Martin Totty said: ‘2017 was a year in which rental price inflation was modest; we actually saw average rents across the country fall during May and June, and while this was not repeated during the second half of the year, we remain some way off the much higher levels of rental price inflation that prevailed in 2015 and much of 2016. We continue to see a very mixed picture regionally: in areas of the country where rents rose less quickly in 2015 and 2016, rental price inflation was much higher last year; by contrast, those areas where rents were previously rising fastest have been seeing much more modest increases.’