A new investigation by Landbay suggests that the UK rental market entered a seasonal slowdown over the last month. Research from the report shows that rents fell by 0.4% in November to stand at £1,290.
There was no festive cheer for landlords in London, where rents were down by 0.6%, bringing down the overall UK average. Typically, the rental market in the capital is sensitive to fluctuating demand from tenants and often sees this type of seasonal slowdown as demand from the summer relaxes.
Yearly rises
However, rents did continue to rise on a year-on-year basis. UK rents were 2.9% greater than in November last year, with wages also up by 3.0%.
These rent increases were driven by one-bed homes, popular with young professionals. Rents in these properties were up by 4% year-on-year, while three-bed properties saw a 3.6% increase.
Rents have seen a upward trend since January 2013 and have climbed by 7% from this period. Wage growth has risen by 4.8% over the same timeframe. One-bedroom rents have increased by 8.6%.
The Southeast was revealed to be the area with the quickest rental growth over the last year.
Rental market sees start of seasonal slowdown
Slowdown
John Goodall, CEO of Landbay, said that, ‘a seasonal Christmas lull has finally managed to put the brakes on the speedy London rental market. But this is a case of notching down a gear rather than an emergency stop, Rents continue their upward trajectory, albeit at a slightly less frenetic pace.’ He observes that,’ London’s rental market is a very sensitive to changes in supply and demand. The November dip is likely to reflect softening tenant demand as new hiring slows in the run-up to Christmas and fewer people move to the capital for work.’[1]
‘On an annual basis rental inflation is tracking wage growth quite closely,’ he continued. ‘Scotland was only part of the UK to see rental growth below 2%. The big picture is that we are in the midst of a housing crisis and that wages are rising-both these facts mean that rents are more likely than not to continue to climb next year. With house prices rising at the same time it is a little wonder that there is such a strong appetite for investments that are secured against British homes.’[1]
[1] http://www.propertyreporter.co.uk/landlords/rental-market-slows-as-uk-enters-festive-period.html