For the first time since the global financial crisis of 2008/09, average rents across the UK have experienced year on year drops, with the latest lettings index showing a 1.3% decrease.
This was also the case on a quarter or quarter basis, leaving the average renter paying £764 per month, according to the data from the Deposit Protection Service covering April to May 2018.
This is the second successive quarter in which rents have fallen, following three quarters of slow growth. The average rent recorded in the second quarter of 2018 at its lowest since the third quarter of 2016.
When London is excluded from the date, the average rent recorded during the second quarter is shown to be down 0.75% on the previous year, leaving the average at £671.
Regionally, Scotland, Northern Ireland and the South West of England bucked the trend – showing rent increases, while every other region saw a drop.
A further breakdown of the data shows that Yorkshire and the Humber experienced the most significant fall in the second quarter of 2018, when compared with the data from the same quarter of 2017. Indeed, rents in the region were down by an average of 2.95% to £550, while the largest value decline was recorded in London, down 2.73% to £1,289.
Meanwhile, the North East replaced Northern Ireland as the most affordable UK region in which to rent property, with the average renter paying £527.
‘Following almost a year of low growth, the UK rental market is now in recession in almost every part of the country. On top of this, our prediction last quarter that rents would decline year on year in the second quarter for the first time since 2009 have proven accurate,’ said Julian Foster, managing director at the DPS.
‘There are clearly long-term issues with the sector that are having a substantial effect on growth, particularly in the capital, and it’s difficult to see this negative trend ending any time soon,’ he added.