UK rents rise again after period of decline
UK rents rose by an average of 1.1 per cent during July, a return to positive inflation following two successive months in which they fell, new data has revealed.
The average rent agreed on a new tenancy signed during July was £925 according to the July HomeLet Rental Index, compared to £915 in the same month of 2016.
Excluding London, rental price inflation across the UK is now running at a much faster rate of 1.6 per cent, with the average UK rent reaching a new high of £769 a month.
July’s year-on-year increase compares to declines in May and June, the first time rents had fallen in the UK since 2009.
Despite this, inflation in the private rental sector continues to lag behind the general rate of inflation, which was 2.7 per cent in June, the latest month for which official data is available.
Alex Huntley, Head of Operations at Simple Landlords Insurance said “The return to positive inflation is good news for landlords who can feel better about seeking higher rents. This should prove lucrative for landlords as long as they continue to be mindful of tenants’ capacity to pay”
“The price of rent often goes up over the summer period as this is traditionally a time when renters consider moving as tenancies come to an end. I hope this year’s seasonal trend brings some relief to landlords who’ve had a hard time in recent months with stagnating and declining rental income.”
She said “the economic conditions allow landlords to reflect positively on their decision to invest in property and give them the confidence to seek to invest more in the future. Property, despite the recent challenges, is still one of the more lucrative investment choices people can make when compared to other available options”
Rented property in Greater London continues to drag down the UK as a whole, with rental inflation in the capital now running at -0.6 per cent a year.
Outside of London, nine out of 11 regions saw rents rise last month, with Northern Ireland leading the way (up 5.7 per cent compared to July 2016) and Scotland performing well (3.6 per cent), while only the South East (-0.9 per cent) and the North East (-1.7 per cent) recorded declines.