Rent rises are beginning to run out of steam, says leading index
HomeLet's latest data reveals how monthly rent increases have slowed to just 0.1% in May, but the UK average remains at an all time-high.
The average monthly rent in the UK has hit a new record, standing at £997 and £854 when excluding London. While this represents a 6.4% rent increase from last year, it’s just 0.1% higher than in April, according to the latest rental index from HomeLet.
It’s the sixth consecutive month that rents have increased nationally but the 12th month in a row where year on year rental values have fallen for London.
Despite experiencing a short uplift of 0.2% between April and May 2021, the annual comparison shows a 0.9% drop and is the only region to not see a year on year increase.
Like its sales counterparts, Scotland is soaring ahead in the rental race, seeing the most significant monthly rent increase of 2.6% and up 3.7% on last year. The news comes as other data reveals property is currently selling fastest in Scotland.
The other devolved nations also outperform the four regions in England that showed a month on month increase in rental values between April 2021 and May 2021. However, the East of England and the South West are leading the way in terms of annual gains, which are over 8%.
Surprisingly, the household rent to income ratio across the UK, when excluding London, has remained unchanged from 12 months ago, suggesting that wages have risen in line with rent increases despite the pandemic.
Andy Halstead, Group Chief Executive, HomeLet (pictured), said: “We’ve seen from sharp house price spikes across the country that the Coronavirus pandemic changed what Britons are looking for in a property. Many said to be looking for properties offering more living space; for those working from home as an example, that’s also the case in the private rented sector.
“Rental properties continue to play a crucial role in meeting the demands of people up and down the country, and the flexibility and responsiveness shown by the private rental sector will be vital in the coming months as the country opens up again. As rents increase, we’ve also seen an increase of over 10% in suspicious and fraudulent applications for let property; with backlogs and delays in processing evictions, the demand for high-quality tenant reference and insurances has never been higher.”
