UK rents fell in November

Rents across the UK grew by 0.53% in 2017 but fell by 0.01% in November – the first fall in at least half a decade as a two-speed market emerged between London and much of the rest of the UK.

UK rents fell in November

That was according to Landbay’s National Rent Review, which found that annual rental growth fell by 0.83% in London, weighing down otherwise resilient rental growth elsewhere (1.27%).

John Goodall, chief executive of Landbay, said: “Landlords have faced up to challenge after challenge over the past two years, from stricter regulation, reductions to tax relief, and a significant stamp duty tax hike when buying a buy-to-let property.

“One would expect this pressure to push up rents, but two key factors have allowed them to shoulder these rapidly rising costs: the Bank of England’s enduring Term Funding Scheme (TFS), which has injected a significant sum of cheap capital into banks, together with record low interest rates, which have also kept borrowing costs low.

“With interest rates now rising, and the TFS coming to an end in February, we expect upward rental pressure to be just around the corner. Without a radical house building plan for purchase as well as purpose-built rental properties, rental prices are in danger of soaring over the coming decades.”

The average UK rent has now plateaued at a record £1,196 per month, up from £1,190 at the turn of year.

The slowdown in rental growth has varied across the country with substantial growth in 2017 at 2.13% in the East Midlands, 1.65% in the South West and 1.57% in East England.

The North East has also seen rents grow at a faster rate in 2017 than at any other time in the past five years (0.65%).

London rents have fallen for 18 months since rents in the Capital first entered negative territory. It continues to be the main source of the UK’s slowdown, with rents falling in 26 of the 33 London boroughs. Having said that, London rents remain, on average, 2.5 times greater than those across the rest of the UK.

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