Rental price inflation has seen slight decline in November, with average rents up just 0.7 per cent year on year.
The average monthly rent agreed on a new tenancy now stands at £904. This is up slightly from £898 in the same month last year. Rental price inflation has lagged behind the general rate of inflation now for 11 successive months. The latest figures from the Office for National Statistics show that inflation in the UK, as measured by the Consumer Prices Index, currently stands at 3.1 per cent. This means that rents have declined in real terms for almost the whole of 2017. The last time that rental price growth exceeded inflation was December 2016 when the HomeLet Rental Index recorded an increase of 1.7 per cent against a CPI reading of 1.6 per cent.
However, the national average masks regional variation. The East Midlands, Northern Ireland, the South-West of England and the North-East of England all recorded annual rental price inflation of over 3 per cent during November
In contrast, the HomeLet Rental Index revealed that rents fell in three regions of the UK. These included Greater London, the East of England and the South-East of England.
London recorded rental decline of 0.2 per cent, marking the fifth consecutive month of decline. The average tenancy agreed in London last month cost £1,530, down from £1,556 in October. Removing London from the national picture, inflation would have stood at 1.1 per cent.
On a monthly basis average rents fell in 10 out of 12 regions of the UK last month. Only the South-West and the North-East saw positive growth.
HomeLet’s Chief Executive Officer, Martin Totty commented on the research: ‘So far this year we have seen very modest rental price inflation; rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we last saw during the first half of 2016. HomeLet’s monthly data continues to support a picture of modest increases in rents over 2017 and, in most instances, a reduction in real terms against the backdrop of underlying higher inflation.’