With the latest figures from the Office for National Statistics showing that inflation in the UK, as measured by the Consumer Prices Index, currently stands at 3.1%, November’s data means that rents have reduced in real terms for almost the whole of 2017. The last time that average rental price growth exceeded inflation was December 2016, when the HomeLet Rental Index recorded an increase of 1.7% against a CPI reading of 1.6%.
However, the national data masks significant regional variations, with rents in some parts of the country rising much more quickly. The East Midlands, Northern Ireland, the South-West of England and the North-East of England all recorded annual rental price inflation in excess of 3% during November. By contrast, the HomeLet Rental Index shows rents fell in three regions of the UK, with Greater London, the East of England and the South-East of England all recording negative figures. HomeLet’s regional data is available in more detail via an online interactive infographic.
November’s 0.2% fall in rents in London was the fifth month this year in which the capital has recorded negative rental price inflation. The average tenancy agreed in London last month cost £1,530, compared to £1,556 in October. Stripping out the effect of London rents from the national picture, rental price inflation across the UK would have been 1.1% last month rather than 0.7%.
On a monthly basis, comparing November to October, average rents fell in 10 out of 12 regions of the UK last month, with only the South-West and the North-East in positive territory. Last month’s 0.7% rate of annual rental price inflation compares to an average of 2.8% in November 2016, some four times’ higher.
Martin Totty, HomeLet’s Chief Executive Officer, said: “So far this year we have seen very modest rental price inflation; rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we last saw during the first half of 2016. HomeLet’s monthly data continues to support a picture of modest increases in rents over 2017 and, in most instances, a reduction in real terms against the backdrop of underlying higher inflation.”
