The latest Lettings Index from Countrywide reveals that average rents in Great Britain have fallen for the first time in over six years.
This has been driven by a fall in the cost of new tenancies across London and the South East of England.
Nationally, rents slipped by 0.6% in the last year, to fall to £921pcm in February. This was a fall of just £5 from February 2016.
Those renting in the capital and in the South East were given more substantial relief, with annual rents in these regions dropping by 4.7% and 2.6% respectively.
This drop was triggered by a flood of new rental homes coming onto the market and a fall in demand. Interest from renters dropped by 3% in London and by 5% in the South East, in comparison to the same period last year.
However, increased demand in other regions means that rents have actually risen in many areas of the UK, albeit at a slower rate than seen in January. This was lead by rises in the East and West Midlands.
When London is excluded from the Index, rents actually rose by 0.8% on average year-on-year.
The table below indicates how new lets and average rents have fared year-on-year and month-on-month:
|Region||Ave Rent Feb-17||Ave Rent Jan-17||Ave Rent Feb-16||February Rent YOY|
|East of England||£974||£1,014||£945||3.1%|
|Great Britain (ex London)||£815||£814||£808||0.8%|
Johnny Morris, research director at Countrywide, noted: ‘Rents are growing in most of the country but falls in London and the South East are dragging down the national growth rate. Recent falls are small in the context growth in recent years. Rents are a third higher in London and the South East than in 2007.’
‘Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south. While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth,’ he added.
The table below indicates the changes in supply and demand during the last year in regions covered by the Countrywide Index:
|YOY change in homes to let||YOY change in registered tenants|
|East of England||10%||8%|
|Yorkshire & Humber||7%||7%|
|Great Britain (ex London)||8%||7%|