Home » Uncategorised »
Rent growth slows to pace of house price rises
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
This follows nine consecutive months of accelerated growth.
Increases
The report shows that rent prices are now 8.5% greater than one year ago for the three months to September 2015, following six months of annual growth over 10%.[1]
Average rent for new tenancies in Britain over the period was £995 per month. However in Greater London, this figure rose to £1,555 per months, despite monthly rents dropping for the first time since February 2015.
Data from the Index suggests that deflation across the economy, alongside rising incomes, means that the drop in rents could be a temporary occurrence.
Regional rises
Figures from the report show that nine out of twelve UK regions are experiencing rent price rises on an annual basis. The largest increases were seen in Scotland (8.4%), the East Midlands (7.7%) and Greater London (6.6%).[1]
Three regions are in negative annual price movement, with prices in the North West down by 4.6%, East Anglia 2.2% and Northern Ireland 1.4%.[1]
When comparing September’s figures to those in the previous month, the Index shows that just three regions have sent rental increases since August. In the three months to September, only Scotland (1.2%) and the East and West Midlands (1.4%) have seen price increases.[1]
Rent growth slows to pace of house price rises
Falls
All other regions saw a modest dip in rents in the same period. The largest falls were seen in South West (2.4%), the North East (2.3%) and the North West (2.2%) respectively.[1]
Martin Totty, chief executive of Barbon Insurance Group, owners of HomeLet, stated that, ‘the UK economy has dipped into negative inflation which is a boost to consumers’ spending power and ultimately, their real income. Affordability is an important factor in determining rents.’[1]
‘Depending on what happens with inflation and real incomes over the coming months, this could have a bearing on future rental price trends especially where, in certain areas of the country, the supply of rental properties is not keeping pace with demand from those wishing to be private sector renters,’ Totty concluded.[1]
[1] http://www.propertywire.com/news/europe/uk-rental-prices-index-2015101911106.html
