Private sector rents across the UK fell for the first time since 2012 during the first quarter of 2018 although the rate of decline was less than one per cent, The Deposit Protection Service has revealed.
In the latest version of its Rent Index, the average UK monthly rent during Q1 of 2018 was £772: some £4 (or 0.54 per cent) less than Q4 2017 (£776). The DPS says that if rents remain unchanged or there is another decline in Q2 2018, then the UK will experience its first annual rental decrease since Q4 2009.
But the unpredictability of the current rental market was revealed when HOMELET’s rental index for April was released showing on the basis of their figures, the average rent in the UK is now £918, up by 1.5 per cent on a year ago. When London is excluded, the average UK rent is now £761, a rise of 0.9 per cent on the year.
Julian Foster, Managing Director at The DPS, said: “The decrease in average rents 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. It implies there is more at play than a short-term or local correction to excessive prices.”
Northern Ireland experienced the biggest percentage decrease of any UK region: down 3.14 per cent from £544 to £527, replacing the North East as the most affordable UK region in which to rent property. London saw an £18 decrease in average rent (falling from £1,325 to £1,307): the largest fall in value of any UK region and the second consecutive quarterly decrease for the capital. For HOMELET, the average rent in London is now £1,588 up 4.5 per cent on last year, while the North East saw rents grow by 2.8 per cent in a single month between March and April 2018. Only four UK regions experienced growth in average rent according to DPS: the South East (up from £870 to £879), the East Midlands (from £599 to £602), the North West (from £594 To £595) and Wales, which also experienced the biggest growth (up £21 or 3.62 per cent from £573 to £594).
Every type of property became cheaper on average to rent, with flats experiencing the biggest decrease (down £10 or 1.20 per cent from £796 to £786) in the quarter. As a proportion of salary, rents decreased from 32.63 per cent to 32.45 (using 2017 average wage data).
By Patrick Mooney, editor