UK rental growth is still falling

The most recent Landbay Rental Index shows that the average rent of a new let in Britain rose by 0.24% during the opening six months of 2017.

This was down on the 0.79% recorded during the same period of 2016 and suggests that UK rental growth continues to slow.

Rental Slowdown

A rental slowdown, which began in April 2015, indicates that the supply of rental accommodation is still high, with landlords staying in the market despite recent tax alterations.

London has seen the most profound fall, the June seeing one whole year since month-on-month rental changes in the capital entered negative rates. This remained the only UK region to see rents fall, by 0.59% in the opening half of the year and by 1.01% in the last 12 months.

This compares to growth of 0.69% in the rest of Britain during the opening six months of the year and 1.59% over the 12 month period.

Regional Rates

Outside of the capital, rents have not yet began to fall but have indeed started to decelerate. With the exception of London, rents in England increased by 0.70% during the first six months of 2017. This however was a fall on the 1.14% seen a the same period in 2016.

Wales saw growth of 0.59%, in comparison to 0.83% in 2016, while Scotland saw a rise of 0.65%, compared to 0.69% the year before.

Just Northern Ireland has seen rents for new tenancies start to decrease, sliding to -0.23% in H1 2017 from 0.70% in the opening six months of last year.

UK rental growth is still falling

UK rental growth is still falling

Tenants in the East of England saw the highest growth in rents during the first six months of the year, with an increase of 1.10% recorded.

Should this trend continue in to the second half of 2017, UK rents would start to fall, lowering to -0.08% in the period. When London is excluded, analysis suggests that rental growth could continue to flatten, falling to 0.60% from 069%. Rents in London would fall further to -1.32%.


John Goodall, CEO and founder of Landbay noted: ‘While there remains a huge degree of regional variation, the overall trend has been a slowing of rents across the UK, most markedly in London, where we’ve now seen a full year of falling prices. Wherever they’re based, landlords have had to face a catalogue of challenges over the past two years, from stricter regulation, a reduction in tax reliefs, and a significant stamp duty tax spike when buying a buy to let property. Yet despite these disincentives, they has been little sign of them leaving the market, and even less of them passing on these costs to tenants in the form of higher rents.’[1]

Mr Goodall went on to say: ‘Looking ahead however, this trend is unlikely to continue. Demand for rental properties can be expected to increase as we come out of the seasonal summer slowdown, and October’s PRA changes give landlords yet another incentive to push through transactions before the new regulations kick in. The changes will require any landlord with more than four properties to be assessed against their full portfolio when applying for finance. There’s no avoiding the extra workload this will cause in the short term, and lenders and brokers alike should be preparing for both a rush to beat the deadline and also the extra valuations work that will need to be done on the other side. Rents may be decelerating, but brokers will need to keep their foot on the gas throughout H2 and beyond.’[1]



©2020 Just Landlords