The Deposit Protection Service (The DPS) has found that average UK rents increased at less than half the rate during 2017 than they did in 2016.
As part of its latest Rent Index, which is based on 10 years of data from millions of properties across England, Wales, Scotland and Northern Ireland, it revealed that average UK monthly rent during 2017 rose by only 1.63% - from £761.31 to £773.74. This was half the rate of growth seen during 2016 (when rents went up by 3.25% to £737.33).
The slowdown was at its starkest in London, with the capital experiencing the lowest rise in average rent of any British region, up by only £5.83 (or 0.44%) to £1,324.29.
“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,” Julian Foster, managing director at the DPS, said. “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.”
When London is taken out of the picture, average monthly rents in the UK grew faster, up £13.95 (or 2.11%) to £675.82. Even then, rent growth outside the capital was still considerably lower than in 2016, when the average increased by 3.4%.
Meanwhile, for the first time since 2013, rental growth in 2017 lagged behind the rate of inflation. On the other hand, incomes grew slightly faster than rents, with average rent accounting for 32.54% of the average salary, compared to 32.65% in 2016.
During 2017 Northern Ireland saw the biggest percentage increase in average monthly rent, with the East of England a close second.
The biggest increase in value by property type was for rents on semi-detached houses, up by 2.43%. By contrast, rents for flats experienced the lowest rise in value of the four property types analysed, up by only 1.22%.