Average UK rent price growth halved during 2017 when compared to the previous year, according to the latest Rent Index from The Deposit Protection Service (The DPS).
The report shows that the average monthly rent across the UK rose by just 1.63%, from £761.31 to £773.74 in 2017. This is half the rate recorded during 2016, when the average rent price increased by 3.25%.
The slowdown was particularly pronounced in London, which experienced the lowest increase of any British region, rising by just 0.44% (£5.83), from £1,318.46 per month to £1,324.29.
Julian Foster, the Managing Director of The DPS, comments: “Rent growth was slower in 2017 than 2016 and when compared to inflation and wages, suggesting that general economic uncertainty is affecting the private rental sector particularly.
“London’s growth was particularly sluggish, bringing down the national average further, although rents here and outside the capital remain a large proportion of wages.”
He continues: “The current slowdown in fact began in mid-2016, and is likely to be linked to the EU referendum result; it will be interesting to watch the index as the UK Government’s negotiations with the E27 and other economic influences progress during 2018.”
Excluding London, the average monthly rent in the UK grew faster, by 2.11% (£13.95), from £661.88 to £675.82.
Nevertheless, rent growth outside of London was still significantly slower than in 2016, when the average rent rose by 3.40% (£21.78).
For the first time since 2013, rent growth in 2017 was lower than the rate of inflation (2.70%).
During the past 12 months, incomes grew slightly faster than rent prices. The average rent represented 32.54% of the typical salary, compared to 32.65% in 2016.
Northern Ireland experienced the highest increase in the average monthly rent last year, at 3.66% (£18.76), from £512.74 to £531.74.
In the rest of the UK, the East of England saw the greatest rise in the average rent during 2017, at 3.15% (£24.57), from £782.44 a month to £807.01.
Rents in London represented the highest proportion of wages in 2017, at an average of 43.04%. Meanwhile, outside of the capital, the average rent in the South East represented the highest proportion of a tenant’s salary (35.01%), with the North East being the lowest (25.05%).
Northern Ireland witnessed the largest increase in rent as a proportion of wages during 2017, rising by 0.85%, from 23.88% to 24.73%.
The average rent on a semi-detached house experienced the greatest rise in value of the four property types over the past 12 months, at 2.43% (£18.93), from £780.57 per month to £799.50.
Rent prices for flats witnessed the lowest increase in value of the four property types, at 1.22% (£9.56), from £782.20 to £791.76.