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Rental price inflation slows

The Negotiator

Rents across the UK continue to rise, as HomeLet research reveals, though the pace of rental price inflation has slowed considerably. The average rent agreed on a new tenancy signed in October was £909 according to the HomeLet Rental Index, 0.9% higher than in the same month of last year.

October was the fourth successive month in which rents rose following small falls in May and June. However, October’s 0.9% increase was significantly lower than in August (2.4%) and September (2.1%).

The slowdown reflects a shift in short-term trends in the PRS. While rents were higher in October than in October 2016, in 11 out of the 12 regions of the UK covered by the HomeLet Rental Index, every single region saw rents fall back compared to September’s figures. While these month-on- month declines still left rents in most areas higher than a year ago, they depressed the annual rate of rental price inflation.

The London market, with above national inflation, is a good example. Rents agreed on new tenancies in the capital in October were 0.6% higher than in the same month of 2016, but 2.3% lower than this September.

Nevertheless, London’s higher rents continue to weight the national average. The rent on the average tenancy agreed in the capital last month was £1,556; stripping out London from the national figures, the average rent across the rest of the UK was £755.

HomeLet’s research shows that rents are currently rising most quickly in the East Midlands and Northern Ireland, where rents agreed on new tenancies last month were 3.6% and 3.4% higher respectively than in October 2016. At the other end of the scale, rents in the East of England were just 0.2% higher last month compared to a year ago, while rents in the South-East fell by 0.8%.

HomeLet rental index chart image

December 5, 2017

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