Average rent in the UK decreased for the first time since 2012 during the first quarter of 2018, The Deposit Protection Service (DPS) has revealed.
The DPS has collected data from millions of properties across England, Wales, Scotland and Northern Ireland over the past decade. It’s found that the average UK monthly rent during the first quarter (Q1) of 2018 was £772. This latest version of its Rent Index, has found this means the average monthly rent is £4, or 0.54%, less than the last quarter of 2017 (£776).
The DPS also says that if rents remain unchanged or there is another decline in Q2 2018, the UK will experience its first annual rental decrease since the end of 2009.
Julian Foster, Managing Director at The DPS, said: “The decrease in average rents across the UK could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy.
“Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector.
“The UK-wide decrease implies that there is more at play than a short-term or local correction to excessive prices, and a similar reduction in Q2 could represent the first annual decrease in rents since 2009.”
Average UK rents decrease for the first time since 2012
Some key findings of the report are summarised below.
The main regions of the UK that experiences the biggest decreases in average rent:
- Northern Ireland experienced the biggest percentage decrease of any UK region, of 3.14% (or £17) from £544 to £527, replacing the North East as the most affordable UK region in which to rent property.
- As a region London saw an £18 decrease in average rent (falling 1.39% from £1,325 to £1,307). This makes it the largest fall in value of any UK region and the second consecutive quarterly decrease for the capital.
- As a proportion of salary, rents decreased by 0.18%. This equates to rent prices taking up 32.63% of a salary, to 32.45%. These figures were obtained with the most recent data for average wages available, from 2017.
Only four UK regions experienced growth in average rent:
- Wales, which experienced the biggest growth at 3.62% (£21 from £573 to £594).
- The South East at 1.01% (£9 from £870 to £879)
- East Midlands at 0.45% (£3 from £599 to £602)
- North West at 0.18% (£1 from £594 To £595)
In terms of the type of rental property, such as flats, family houses, terraces, every type of property became cheaper on average to rent. Flats experienced the biggest decrease of the quarter, of 1.2% – £10 from £796 to £786.
The Index was developed by Professor of Global Economy, Joe Nellis, who was jointly responsible for the research and development of the UK’s leading house price measurement systems, the Halifax and the Nationwide House Price Indexes, and Catarina Figueira, Professor of Applied Economics and Policy, both of Cranfield School of Management.