Rents still growing but slowing

Homelet's rental data for June 2016 has the average rent in the UK (excluding Greater London) at £773 per month,  annual growth of 3.5% , with the average rent in London now at £1,575, up 3.9% on the year.

Although rents are still going up, the annual rate of growth has slowed. Annual growth rate in May was 4.4 per cent ( compared with June's rate of 3.5%), with London down from 6.2% last month to 3.9% in this latest data.

Compared with this time last year when annual rental growth rate was at 7.8% (London at 10.1%).

Homelet Chief Executive Officer, Martin Totty, comments:

“The June HomeLet Rental Index shows that the rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently. Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth”

The impact of the EU referendum vote will now play out over the months ahead: if, as expected, the result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked; all the more so if more people decide to rent while waiting to see what happens to house prices.

Landlords will be considering their position carefully, particularly in the light of further taxation changes to come next year, which could reduce net yields; with long-term drivers such as net population growth still in place, it is likely that rents will continue to rise, though affordability will continue to be crucial. The recent slowdown in rental growth rates may suggest an affordability ceiling is being approached.”

Read in full - the Homelet Rental Index June 2016

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