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Rental growth slows across the UK, up just 0.4% in first half of 2018

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Sat 07 Jul 2018

Rental growth slows across the UK, up just 0.4% in first half of 2018

Rental growth in the UK has continued to slow, with rents increasing by just 0.4% in the first half of the year, the latest index data shows.

The East Midlands and the East of England have led the growth with a rise of 0.95% and 0.70% respectively, according to the Landbay index.

At a county level, Nottingham saw the fastest rental increases in H1, at 1.43% and 1.25% respectively.

In contrast, the North East has dragged behind with rents falling by 0.08% in the first six months of 2018.

Meanwhile rents in London grew by 0.1% in the 12 months to June 2018, the first annual rental rise in the city since December 2016 with rental values up in 25 out of the 33 boroughs over the last six months.

The average rent paid in the UK is £764 per calendar month and in London it is £1,884, some 2.5 times the rest of the country.

‘While there remains a huge degree of regional variation, the overall trend has been a slowing of rents across the UK in the first half of this year. However, much of this has been London weighing down heavily on otherwise resilient growth across the UK.
Now that London rents have bounced back to growth this could all be about to change,’ said John Goodall, chief executive of Landbay.

‘Wherever they’re based, landlords have had to face a myriad of challenges over the past two years, with regulatory and tax changes reshaping the sector. Despite this, there has been little sign of them passing on additional costs to tenants,’ he pointed out.

‘However, with a rate rise on the horizon, meaning a rise in the cost of borrowing for landlords, we may well start to see landlords increasing rents in the coming months to stay afloat,’ he added.

A breakdown of the figures show that overall in the UK rents increased by 0.07% month on month and 0.81% year on year to an average of £1,204, but excluding London monthly growth was 0.1% and annual growth 1.19% to an average rent of £764.

In England rents increased 0.07% month on month and 0.77% year on year to ££1,236, while in Wales they increased by 0.15% on a monthly basis and 1.69% year on year to £651. In Scotland rent rose by 0.1% month on month and 1.09% year on year to £734 and in Northern Ireland they rose 0.01% on a monthly basis and 1.7% on an annual basis to £573.

So far this year rents have increased by 0.4% nationwide, by 0.54% excluding London, by 0.38% in England, by 0.9% in Wales, by 0.46% in Scotland and by 0.72% in Northern Ireland.