Property News > Rental growth slows across the UK, up just 0.4% in first half of 2018
Rental growth slows across the UK, up just 0.4% in first half of 2018
In the first half of 2018, rents have increased by an average of just 0.4%, continuing the current trend of slow growth, the latest index data shows.Regionally, the East Midlands and the East of England have experienced the highest growth, with figures of 0.95% and 0.70% respectively, according to the Landbay index. Nottingham’s NG1 postcode saw the fastest rental increases at a county level, with a growth rate of 1.43%. By contrast, the rents have fallen by 0.08% in the first six months of 2018 in the North East.Meanwhile in London, rents crept up by 0.1% in the 12 month period up to June 2018. The figures show the first annual rent rise in the city since the end of 2016, with growth occurring in 25 of the 33 boroughs in the capital. The average rent paid by tenants in London per calendar month is currently £1,884, compared to £764 paid by the rest of the UK. ‘While there remains a huge degree of regional variation, the overall trend has been a slowing of rents across the UK in the first half of this year. However, much of this has been London weighing down heavily on otherwise resilient growth across the UK. Now that London rents have bounced back to growth this could all be about to change,’ said John Goodall, chief executive of Landbay.‘Wherever they’re based, landlords have had to face a myriad of challenges over the past two years, with regulatory and tax changes reshaping the sector. Despite this, there has been little sign of them passing on additional costs to tenants,’ he pointed out.‘However, with a rate rise on the horizon, meaning a rise in the cost of borrowing for landlords, we may well start to see landlords increasing rents in the coming months to stay afloat,’ he added.Overall rents in the UK increased by 0.81% year on year and 0.07% month on month to an average of £1,204, a breakdown of the figures shows. Removing London from these figures, the annual growth stands at 1.19%, making the average rent £764.Average rents in England increased by 0.07% month on month and 0.77% year on year to £1,236, while Wales saw average increases of 0.15% on a monthly basis, and 1.69% on a year on year basis, leaving average rents standing at £651. Scotland’s average rent is currently £734 following month on month growth of 0.1% and 1.09% year on year. Meanwhile, in Northern Ireland, the average rent is now £573, following a month on month increase of 0.01% and an annual increase of 1.7%. Across the UK, so far this year rents have increased by 0.4%, or by 0.54% excluding London. A nation by nation breakdown shows averages up in by 0.38% in England, 0.9% in Wales, 0.46% in Scotland, and 0.72% in Northern Ireland.