The rental market continued to cool last month, with rents rising by just 0.7 per cent during November, the 11th consecutive month that annual rent increases have lagged behind inflation.
The average monthly rent in the UK is £904, compared to £898 in November 2016, according to the HomeLet Rental Index.
This slowdown was exacerbated by a fall in rental prices in London, the South East and East of England. In the capital rents fell 0.2 per cent in November on an annual basis. The average monthly rent in the London now stands at £1,530.
November’s data means that rents have reduced in real terms for almost the whole of 2017. The last time the average rental price growth exceeded inflation was December 2016, when the HomeLet Rental Index recorded an increase of 1.7 per cent, and inflation (as measured by CPI) was running at 1.6 per cent.
However, this national data masks significant regional variations, with rents in some parts of the country rising at a far faster rate.
The East Midlands, Northern Ireland, the South West and the North East all recorded annual rental price inflation in excess of 3 per cent during November.
On a monthly basis, comparing November to October average rents fell in 10 out of the 12 regions of the UK, with only the South West and North East in positive territory.
The market has cooled considerably over the past year. While last month rents were rising by just 0.7 per cent a year, in November 2016, rents were rising a more robust 2.8 per cent a year.
HomeLet’s chief executive Martin Totty says: “This year we have seen very modest rental price inflation; rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we saw during the first half of 2016.”
He adds: “HomeLet’s monthly data continues to support a picture of modest increases in rents over 2017 and in most instances a reduction in real terms against the backdrop of higher inflation.”