October saw average rents rise by 0.4 per cent, the slowest increase since May.
However, despite the slowdown in rental inflation, the monthly rise represents double the size of the 0.2 per cent increase seen in the same period last year.
According to the latest Buy-to-Let Index from LSL Property Services plc, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rain, after seven months of rent rises, rents are 3.4 per cent higher than at the same point last year, at a new high of £744 per month.
In London and the South East, rents continued to rise, at rates of 0.9 per cent and 0.7 per cent respectively. Five regions saw rents fall in October, with the sharpest falls in Wales and the East Midlands. Rents in Wales fell by 1.6 per cent, while those in the East Midlands fell 1.8 per cent – the first fall in this region since March.
On an annual basis, rents rose the fastest in London. They increased by 7 per cent to £1,102 – breaking the £1,100 barrier for the first time.
David Brown, commercial director of LSL Property Services comments: “Rents may be rising but the good news for tenants is that the rate of increase is at its lowest in five months. A combination of improved buyer activity and a seasonal slowdown has taken some of the heat out of the rental market as it enters the traditionally quieter final months of the year. However, despite the deceleration, the fact that monthly rents rose by twice the rate seen a year ago points to the underlying strength of tenant demand.”
“Looking ahead, it’s difficult to see rents remaining stationary once the winter lull has passed. Admittedly, the sales market has shown signs of life in the last month, and the Funding for Lending Scheme seems to be acting as a catalyst for a modest improvement in the mortgage market. However, banks still need to set aside large sums of money for high LTV lending, so in the longer term the number of first time buyers won’t return to the level necessary to significantly undercut the strong demand for rental property.”
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