Rents across the UK began to shrink for the first time in over half a decade in November, according to Landbay’s latest national rent review.
The research found that the average rent fell by 0.01 per cent in November, as a two-speed market emerged between London and much of the rest of the UK.
The average rent paid for a UK property grew by 0.53 per cent in 2017 to date.
London rents fell 0.83 per cent in that time, while rents rose 1.27 per cent in the rest of the country.
The average UK rent has now plateaued at a record £1,196 per month, up from £1,190 at the turn of year.
Excluding London means the average rent is £759, up from £750 at the turn of the year, an extra £109 per year.
The slowdown in rental growth has not been consistent across the country.
The East Midlands saw rises of 2.13 per cent, the South West 1.63 per cent and East England 1.57 per cent.
Landbay chief executive John Goodall says: “Landlords have faced up to challenge after challenge over the past two years, from stricter regulation, reductions to tax relief, and a significant stamp duty tax hike when buying a buy-to-let property.
“One would expect this pressure to push up rents, but two key factors have allowed them to shoulder these rapidly rising costs: the Bank of England’s enduring Term Funding Scheme, which has injected a significant sum of cheap capital into banks, together with record low interest rates, which have also kept borrowing costs low.
“With interest rates now rising, and the TFS coming to an end in February, we expect upward rental pressure to be just around the corner.”