The surge in rent price rises seen over the last few months has come to an end, according to the Private Rented Sector Report for September from ARLA Propertymark (the Association of Residential Letting Agents).
Surge in Rent Price Rises Comes to an End
Rent price rises
After several months of rent price rises, the number of letting agents who saw landlords increasing costs for tenants dropped to 27% in September, from 35% in August.
Showing signs that the rental market is heading in the right direction, this is the first month-on-month decrease since May, when the figure also stood at 27%.
However, on an annual basis, the amount of tenants experiencing rent price rises is up – in September last year, just 24% of letting agents saw costs increase.
Demand for rental properties
Last month, there was an average of 79 prospective tenants registered per letting agent member branch – up by 10% on August, when there were 72 per branch.
Supply of rental stock
The number of rental properties managed per member branch remained the same on a monthly basis in September, at an average of 189.
This is down by 2% on September 2016, however, when agents managed an average of 193 properties.
David Cox, the Chief Executive of ARLA Propertymark, comments on the report: “Last week’s consumer price index (CPI) showed that inflation rose to 2.8% in September, up from 2.7% in August. As the cost of living increases, the last thing tenants need is for their rents to rise, so, while it’s great that month-on-month we’re finally seeing a decrease in the number of landlords hiking costs, we need to look at the bigger picture.
“There are still more than a quarter of tenants experiencing rent hikes every month – and that’s too high. As summer drew to a close in September, demand increased in line with our expectations, and, while it’s too soon to see the effect of this on rent costs, we know that when supply and demand are conflicting, rent prices will just continue to rise.”
Although the decline in the number of letting agents seeing rent price rises is good news, another recent report suggests that around a quarter of tenants are still paying over half of their earnings on rent every month.