Rents in London fell for the first time in eight years during April, new research from HomeLet reveals, with rental price inflation across the UK falling to the lowest level for seven years. In London, rents agreed on new tenancies in April were 1.2 per cent lower than in April 2016, the first time that rents in the capital have fallen, year-on-year, since December 2009.
Across the whole country, rents on new tenancies rose by just 0.4 per cent in April compared to the same month last year, the lowest level of inflation recorded in the private rental market since February 2010.
HomeLet’s monthly Rental Index has been charting slowing rental price inflation since last summer, when the nationwide figure peaked at 4.7 per cent. The slowdown is particularly marked in areas where inflation was previously highest, while regions that saw less dramatic increases are now seeing rents continuing to rise more strongly. Wales, the North-East of England, Scotland and Northern Ireland saw the highest annual rental price inflation figures last month.
The figures suggest that while the demand for rental property is still ahead of supply, landlords and letting agents have been careful not to push for excessive rents from their tenants.
In London, the average rental property now costs £1,519 a month, compared to £1,537 a year ago. The broader South-East region was the only other area to see a decline, albeit with a much more modest fall of 0.4 per cent. The average UK rent now stands at £904 a month, or £754 stripping out the London market.
Looking forward, landlords will now have to decide how to respond to cost pressures such as the reduction of tax relief available on mortgage interest. With demand for rental property outstripping supply, pressure on rents is set to continue, but landlords are clearly weighing up the question of whether to charge more against tenant affordability.