Rents rose across the UK in July for the first time in three months, new research shows.
According to HomeLet, rents in the UK rose by 1.1% during July following falls in the two previous months.
The average rent agreed on a new tenancy signed during July was £925, compared to £915 in the same month a year ago.
Rents dipped 0.3% and 0.2% in May and June respectively, the first time rents had fallen in the UK since 2009.
Nevertheless, inflation in the private rental sector continues to lag the general rate of inflation, which was 2.7% in June.
Despite the rise nationally, rents in London fell for the fourth month in a row.
Annual rental inflation in the capital dipped to 0.6% and while the pace of decline is slowing – July’s figure compares to a 2.9% drop in June – the capital’s rental market still looks transformed compared to this time last year, when rents were rising at a rate of 6.6%.
All regions outside of the south east and London saw a rise in rents last month, rising fastest in Northern Ireland and Scotland.
HomeLet’s chief executive, Martin Totty, said: “It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs. This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.
“At the same stage last year, the South East was the main driver of UK average rents. This time around it’s regions throughout the country leading the strengthening in rents.
“Whether the market has now found some equilibrium remains to be seen, but landlords at least will be grateful for even some short respite. Predicting where the market heads from here is very difficult given the number of competing forces impacting the sector, either already being felt or still being contemplated.
“We know housing stock for sale is in short supply and the Bank of England has expressed concerns about the ‘credit overhang’ and lenders’ resilience should economic activity start to slow. At the very least, these factors should not be unhelpful to the rental sector in the immediate future, encouraging landlords to stick with property owning as an asset class, with potential still to provide relatively attractive returns compared with alternative investment choices.”
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