Rental market in England and Wales stable, according to latest index
Average residential rent across England and Wales increases by 0.6% between April and May but despite this monthly change the annual rise of 1.1% is below inflation for the twelfth month in a row.
The data from the latest LSL Property Services index also shows that London rents are now rising at only 1% per year, after heavy investment by landlords in the capital.
In absolute terms, the average rent in England and Wales has risen by £8 in the last 12 months, currently standing at £745 per month, compared to £737 in May 2013.
‘Private renting is becoming cheaper in real terms. May’s latest sub-inflation rent rises will help over nine million tenants. To put that in context, this is more than a hundred times as many households as have benefitted from Help to Buy in its initial stages so far,’ explained David Brown, commercial director of LSL Property Services.
‘These trends put the recent politicisation of the rental market in stark contrast to reality. Rents are not a single pound higher than they were in December yet over the same six months some politicians have portrayed the industry as facing some sort of crisis,’ he said.
‘A squeeze on living standards may well be the biggest challenge of our age. But rents are not the cause. In fact the greatest risk to today’s below inflation rent rises is that political posturing could deter some landlords from the market. Rather than conjuring up a storm, politicians should be working constructively to ensure there are even more homes available to let,’ he added.
The data shows that overall rents in seven out of 10 regions are higher than a year ago. The fastest annual increase is in the South West, where the average monthly rent is now 3.9% higher than in May 2013. This is followed by a 3.8% annual increase in the East Midlands and annual rent rises of 2.3% in the North West.
By contrast, both London and the South East have seen annual rent rises below the overall average. In the South East annual rent rises now stand at just 1.2%, while rents in the capital are now only 1% higher than in May 2013. This puts London sixth in terms of rent rises by region, and represents a significant slowdown since early 2013 when rent rises in the UK capital peaked at 7.9% per year.
In three regions rents have dropped over the last 12 months. This was led by the North East with a 3.6% fall, followed by an annual fall of 2.3% for rents in the East of England, while rents are now 0.4% lower than a year ago in the West Midlands.
On a monthly basis eight out of 10 regions have seen rents rise since April. The fastest month on month increases are in the West and East Midlands, with rents in these regions respectively 1.2% and 1% higher than in the previous month.
Only two regions have seen lower rents…