UK rents down after six years of increases
The cost of renting a home has fallen on average for the first time in six years, according to a survey carried out on behalf of the Deposit Protection Service (DPS).
During the first quarter of 2018, the average monthly rent in the UK was £772, £4 less than in the final three months of 2017.
The report added that should the average rent either fall or stay the same in the second quarter, Britain will have witnessed its first fall in rents over a 12-month period since 2009.
DPS managing director Julian Foster said: “The decrease could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy.
“Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector.”
He suggested the slowdown may be Brexit-related because of its timing.
If this is so, it would explain a correlation between rental trends and how different areas voted in the referendum.
For instance, Northern Ireland, which supported remaining, is now the cheapest region of the UK to rent in, replacing the pro-Brexit north-east. The average rent in Ulster dropped 3.14 per cent from £544 a month to £527.
London, where there are significant fears about the economic consequences of Britain leaving the EU, has seen the largest decline in England, down 1.39 per cent in the last quarter from £1,325 to £1,307.
By contrast it was Wales, which supported Brexit, that saw the highest rental growth, rising by 3.62 per cent. Only three other regions – the south east, east Midlands and north west – saw rents increase.
The prospect of an overall annual fall in rents may have diminished somewhat, however, following the latest data from the Association of Residential Letting Agents.
It revealed that 23 per cent of tenancies saw rent increases in March, the highest number since September last year. That may be an indication that the recent decline has been due to a market correction that has now run its course.
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