March shows slow growth in rental prices
The UK's rental price growth hasn't seen much movement so far this year, according to the latest HomeLet Rental Index. Figures in March saw a small increase, which was the second month in a row to show rises, but prices are still increasing at a rate slower than general inflation.
Latest figures show that the annual rate of rental price inflation in March reached 1.1 per cent. This is a lot lower than the UK consumer price index, which stood at 2.3 per cent last month.
The average price of rent for new tenancies starting in March across the UK was £904 per month, which shows an increase in year-on-year figures, with March 2016 having an average rent cost of £894. It is also a £9 rise when compared to February's average, which was £895 per month, according to HomeLet's findings.
Figures have also shown a large drop in annual rental price growth since June 2016, which was a high point with figures standing at 4.7 per cent. This has been largely caused by the pace of rental inflation falling in areas of the UK that had previously seen fast increases in prices.
Despite the slow increase in rental price inflation, all but two areas of the UK saw rents increase throughout March compared to February, which is a positive sign. The only two areas that saw rents actually fall were the North West of England and Yorkshire and Humberside.
Rents were also higher in March when compared to the same period last year in 11 of the 12 areas covered by HomeLet's data. Just the South East of England saw a small decline in rental prices, which was expected.
Martin Totty, chief executive of HomeLet's parent company, Barbon Insurance Group, said: “In the current housing market, where demand for homes continues to outstrip supply and house prices are out of reach for many buyers, the long-term trend in the private rental sector is likely to be for rental price inflation to continue; however, the HomeLet Rental Index continues to reflect landlords’ focus on offering tenants affordable rents, with rents now increasing at a rate significantly below the general rate of inflation in the UK economy.”