Rents Rising Significantly Below the Rate of Inflation
Growth in rent prices in the UK remains sluggish, sitting significantly below the rate of inflation, according to the latest HomeLet Rental Index.
The annual rate of rent price growth reached 1.1% in March – much lower than the UK consumer price index (CPI) of 2.3% recorded last month, which is putting continuing pressure on incomes.
The average UK rent on a new tenancy in March was £904 per month, which is up on last year’s average of £894 and £9 more than the previous month.
Annual rent price growth has dropped from a high of 4.7% in June 2016, with the decrease in rents most marked in areas of the country where prices were previously increasing fastest.
Rents in March rose in every area of the country except two when compared to February, with Yorkshire and the Humber and the North West as the only decliners.
Annually, rents were higher in March than a year previously in 11 out of the 12 regions covered in the Index, with the South East recording a marginal decrease.
The Chief Executive of Barbon Insurance Group – HomeLet’s parent company – Martin Totty, comments on the data: “In the current housing market, where demand for homes continues to outstrip supply and house prices are out of reach for many buyers, the long-term trend in the private rental sector is likely to be for rental price inflation to continue; however, the HomeLet Rental Index continues to reflect landlords’ focus on offering tenants affordable rents, with rents now increasing at a rate significantly below the general rate of inflation in the UK economy.”
The following table looks at rent price changes recorded in March:
| Region | Average rent – March 2017 | Average rent – February 2017 | Average rent – March 2016 | Monthly variation |
Annual variation |
| Wales | £616 | £602 | £598 | +2.3% | +3.1% |
| Yorkshire and the Humber | £619 | £621 | £607 | -0.3% | +2.1% |
| North East | £522 | £522 | £512 | +0.0% | +1.9% |
| North West | £675 | £680 | £664 | -0.7% | +1.7% |
| East Midlands | £602 | £595 | £593 | +1.1% | +1.6% |
| Northern Ireland | £614 | £604 | £605 | +1.6% | +1.5% |
| West Midlands | £663 | £659 | £654 | +0.6% | +1.4% |
| Scotland | £610 | £597 | £602 | +2.1% | +1.2% |
| Greater London | £1,546 | £1,520 | £1,527 | +1.7% | +1.2% |
| East of England | £902 | £896 | £892 | +0.7% | 1.1% |
| South West | £798 | £791 | £791 | +0.9% | +0.0% |
| South East | £997 | £992 | £1,000 | +0.5% | -0.3% |
| UK | £904 | £895 | £894 | +1.1% | +1.1% |
| UK excluding Greater London | £751 | £746 | £744 | +0.7% | +1.0% |