The latest Buy-to-Let Index from Your Move and Reeds Rains has revealed that rents across England and Wales have dipped below what is seen as the “psychologically important” £800 mark.
Average rents currently stand at £799 per month, following a month-on-month drop of 1.2%. It is also down from September’s all-time record high of £816.
Rents, though, have still risen significantly over the last year despite these month-on-month falls, with annual rent rises of 4% across England and Wales since November 2014. Once CPI inflation of 0.1% has been taken into account, real-terms annual rent rises stand at 3.9%.
Unsurprisingly, London leads the way, with rents in the capital now 8.9% higher than November 2014. The East of England was next highest, with annual rent rises of 8.4%.
On the other hand, Wales has seen rents fall by 3.8% in the last year, while there has been a 3.5% annual drop in the South East.
“Rents are cooling – and this presents a winter window of opportunity,” Adrian Gill, director of Reeds Rains and Your Move, said. “As Christmas approaches, savvy tenants looking to move are taking the chance to negotiate a better deal in the off-peak lettings market.”
“But beneath the surface the private rented sector is still warming,” he added. “Two and a half years ago we predicted rents breaking through £800 in mid-2015. This became reality in July 2015 when average rents soared through that boundary in a string of new records. Winter will be a pause. But spring is coming.
Gill said that, in the space of a few short months, landlords have become fashionable targets for the Government and the Bank of England. “This is overdue attention for the sector that provides homes for more than one in five Britons,” he commented. “But negative campaigns and unconstructive policies – designed to attack landlords rather than support tenants – will not make rents lower or provide more homes. The effect will be quite the opposite, forcing rents upwards.”