Falling rents in London helps slow average rental growth

Wednesday 9th November 2016

The latest Landbay Rental Index has found that the average rent for a UK property increased by 0.05% in October, slowing from 0.09% in September. 
Declining rents in London (down 0.11%) tempered otherwise resilient rental growth in the rest of England (0.15%) and the UK (0.14%).
However, the overall fall in rents in the capital doesn't tell the whole story. While four affluent London boroughs – Westminster, Kensington and Chelsea, Richmond upon Thames and Camden – were marooned in the UK's bottom ten 'rental fallers' in the past year, just seven of the 33 London boroughs have witnessed rental growth turning negative year-on-year. 
In two boroughs – Bexley and Barking and Dagenham – rents have increased by more than 3%, with another 14 boroughs seeing growth above the UK average of 1.49%. 
Over the last 12 months there have been a number of hotpsots for rental growth across the UK, including Luton (7.11%), Edinburgh (5.63%) and Northamptonshire (5.59%). Nine of the ten top rental risers were found in England. 
By contrast, Aberdeen (-13.22%) and Aberdeenshire (-9.03%) have been badly hit by the dramatic drop in oil prices since mid-2014, witnessing by far the greatest falls in rents in the UK over the past year. 
Inverclyde and Dundee were two other Scottish counties finding themselves in the bottom ten 'rental fallers'. On the whole, though, Scotland has actually seen rents increase by 1.55% over the last 12 months, the fastest growth of any country in the UK. 
“Rental growth is slowing across the UK, but the pace of change varies wildly between regions,” John Goodall, CEO and co-founder of Landbay, said. “Falling rents in some of the most expensive parts of the country, especially prime London locations, can distort the picture for the rest of England and the UK where rents are continuing to grow at a steady pace. In the last month alone, rents fell by -0.11% in London, while they continued an upward climb of 0.15% in the rest of England.”
He added: “Any moderation in rental price inflation will always be welcomed by generation rent, the swelling population of aspiring homeowners and long-term tenants. As this month’s Autumn Statement comes over the horizon, all eyes will be on how the UK’s chronic housing shortage will be addressed. Unless supply catches up with demand, there's nothing to suggest overall rents will go in any direction other than up.”
According to Landbay's findings, the average UK rent is now £1,188, with London’s average standing at £1,889 and the rest of the UK being £748 per month.

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