According to the latest data and analysis from The Deposit Protection Service, Average UK rents increased at less than half the rate during 2017 than 2016.
According to The DPS, which has based the Index on a decade of data from millions of properties across England, Wales, Scotland and Northern Ireland, average UK monthly rent during 2017 increased by just 1.63% from £761.31 to £773.74 during 2017; half the rate of growth during 2016 (3.25% from £737.33).
The slowdown was particularly pronounced in London, which saw the lowest increase in average rent of any British region, increasing by just £5.83 or 0.44% to £1,324.29 (from £1,318.46).
The report revealed, excluding London, that average monthly rent in the UK grew faster: £13.95 or 2.11% to £675.82 (from £661.88).
Nevertheless, rent growth outside of London in 2017 was still significantly slower than in 2016, when the average increased by £21.78 or 3.40% (from £661.88). For the first time since 2013, rental growth in 2017 was lower than the rate of inflation (2.70%).
During 2017, incomes grew slightly faster than rents; average rent represented 32.54% of average salary (compared to 32.65% in 2016).
Northern Ireland saw the highest percentage rise in average monthly rent during 2017:
£18.76 or 3.66% from £512.74 to £531.74.
In the rest of the UK the East saw the highest percentage rise in average monthly rent during 2017: a 3.15% or £24.57 increase from £782.44 to £807.01.
Rents in London represented the highest proportion of wages during 2017 (43.04%), whereas outside the capital, average rent in the South East represents the highest proportion of salary (35.01%); the North East the lowest (25.05%). Northern Ireland experienced the largest increase in rent as a proportion of salary during 2017, rising by 0.85% from 23.88% to 24.73%.
Rent for semi-detached houses experienced the biggest increase in value of the four property types during the course of 2017 (£18.93 or 2.43% from £780.57 to £799.50).
Rent for flats experienced the lowest increase in value of the four property types: (£9.56 or 1.22% from £782.20 to £791.76).
Julian Foster, Managing Director at The DPS, said: “Rent growth was slower in 2017 than 2016 and when compared to inflation and wages, suggesting that general economic uncertainty is affecting the private rental sector particularly.
London’s growth was particularly sluggish, bringing down the national average further, although rents here and outside the capital remain a large proportion of wages.
The current slowdown in fact began in mid-2016 and is likely to be linked to the EU referendum result; it will be interesting to watch the Index as the UK government’s negotiations with the E27 and other economic influences progress during 2018.”