Rents are tumbling across many parts of the UK according to the latest rental index from referencing firm HomeLet, whose Chief Executive has questioned the wisdom of recent government measures to reduce landlord appetite for investment.
HomeLet says rents fell in the UK by 0.3% last month, the first time this has happened since late 2009 and that rents in London have dropped by 3% over the past year from £1,572 a month last July to £1,502 a month in May.
“May 2017 saw average rents nationally fall for the first time in eight years when the economy had suffered the shock of the financial crisis,” says Martin Totty, Chief Executive of HomeLet (pictured, left).
“[Our] rental data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs.
“Tenants will still need a vibrant and growing rented sector to provide them with property options at the time of their choosing.
“Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow.”
The average rent across the UK for a new tenancy in May dropped to £901 which HomeLet describes as a “significant moment for the rented property sector” because rental price growth has been slowing in recent months since hitting a peak of 4.7% last summer.
But it’s not just London’s crazy property market dragging the rest of the country down. Rents also fell dramatically in several key areas including the North East (-2.3%), Scotland (-1.9%), the South East (-1.5%) and Yorkshire & Humberside (-0.6%).
The average UK figure would be much worse if it wasn’t for several regions where rents are picking up including the East Midlands (+3.3%), the North West (+2.2%) and the South West (+2.1%).
The reasons for the slowdown have been blamed squarely by the lettings industry on the government’s recent financial squeeze on landlords including most recently by Belvoir in its Q1 review of the rental market.
Read the full HomeLet index.