UK rents fell for the second month in a row in June, driven by lower rents in London and the South East, new research shows.
According to HomeLet’s June rental index, rents across the UK have fallen 0.3% in the year to June.
This took the average monthly rent of a new tenancy in May down to £908.
Rents fell in May for the first since December 2009, mirroring a similar dip in the housing market.
The London rental market continues to act as the driver on average rents across the country, with a 2.6% decline in the average rent agreed on a new tenancy in the city last month.
Rents in the capital have fallen on an annual basis for three months in a row, having risen more quickly than anywhere else in the country during the first half of last year – rental price inflation in London peaked at 7.1% in June 2016.
HomeLet’s data suggests that landlords are reluctant to charge higher rents in the current uncertain economic climate.
While demand for private rental property remains high relative to supply, landlords continue to be conscious of affordability issues to tenants.
The annual variance in the UK rental values has been in decline for 12 months. At the time rents were up 4.5% on an annual basis, since then the rate of growth has dropped gradually each month to reach -0.3%.
However, there is some evidence that the rental market is now stabilising with no change in the rate of decline between May and June.
Martin Totty, HomeLet’s chief executive officer, said: “It is now a full year since rental price inflation in the UK peaked at 4.7%, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country.
“June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty – the next few months of data from the HomeLet Rental Index will provide crucial intelligence on the direction the market is taking.”
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