The average monthly rent across England and Wales has dipped below £800 a month, new figures show.
According to Your Move and Reeds Rains, average rents fell 0.9% to £799 in November from £806 the previous month.
Despite the festive dip, the annual pace of rent rises is 4.0% higher than last year on average, with London rents 8.9% higher on an annual basis.
Adrian Gill, director of estate agents at Reeds Rains and Your Move, said: “Rents are cooling and this presents a winter window of opportunity. As Christmas approaches, savvy tenants looking to move are taking the chance to negotiate a better deal in the off-peak lettings market.”
Looking across the country, six out of ten regions of England and Wales have seen rents fall on a monthly basis.
The fastest month-on-month fall was witnessed in the South East, down 3.0% since October. This was followed by the South West with a 2.0% fall, while in London rents have dropped 1.2% between October and November.
Welsh tenants saw the biggest rise month-on-month of 2.9%, followed by the East Midlands at 1.0%, the West Midlands with 0.4%, and Yorkshire & Humber with 0.2% monthly rent rises.
Both Yorkshire & Humber and the East Midlands saw average rents reach record levels in November, standing at £554 and £610 respectively.
Despite suppressing rental yields, accelerating property purchase prices have helped boost landlords’ finances. The average landlord in England and Wales has seen total returns of 10.9% for the year to November – up from 10.4% in October 2015.
Some commentators have criticised the government’s plan to introduce a new 3% stamp duty charge to dampen the buy-to-let market next April as it could lead to a rise in rents.
If investors are put off from buying property this could lead to a reduction in supply and landlords could also try to offset their stamp duty bill by raising prices.
Gill said: “In the space of a few short months, landlords have become fashionable targets for the government and the Bank of England. This is overdue attention for the sector that provides homes for more than one in five Britons. But negative campaigns and unconstructive policies – designed to attack landlords rather than support tenants will not make rents lower or provide more homes. The effect will be quite the opposite, forcing rents upwards.
“Combined with the latest attacks on landlords from the government this could propel demand even higher for every single home that landlords do have to offer. A continued shortage of properties to let is the challenge to overcome and the government needs to think pragmatically about this conundrum rather than looking for political targets.”
