New tenancy rents down in October
Average rents in the UK grew by 0.9 per cent year on year during October, which took the average monthly rent agreed on new tenancies to £909, according to the October HomeLet Rental Index.This was the fourth successive month of increases following a short period of falling rents in the spring of 2017, the firm said.
In the same month of last year, the average rent agreed on a new tenancy signed was £901.
However, HomeLet explained that although October’s average increase reflects higher rents recorded in 11 out of the 12 areas of the country that it monitors - with the south east of England being the exception - the pace of rental price growth has slowed.
October’s 0.9 per cent rise follows increases of 2 per cent and 2.4 per cent in September and August respectively. HomeLet also said that on a monthly basis, rents on new tenancies in October were lower in every area of the country than in September.
In London, the national picture was reflected, where annualised rental price inflation was 0.6 per cent in October, down from 1.8 per cent and 2.5 per cent in September and August respectively. The average tenancy agreed in London last month cost £1,556, compared to £1,593 in September.
The largest monthly drop in rent was seen in the south west of England. Rents dropped by 2.9 per cent from September to October. However, the region saw an annual growth of 1.6 per cent in the year to October 2017.
HomeLet’s figures come as the Royal Institute of Chartered Surveyors (RICS) has released its October 2017 UK Residential Market Survey, which found that tenant demand was flat for the three months to October, while new landlord instructions remained in decline.
RICS forecasts that rental growth will be “modestly positive” for the three months ahead, while over the next five years, rents are anticipated to rise by an average of around 3.5 per cent annually across the country.
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