Excluding London, rents in the UK rose by 1.18% in the 12 months to July 2018 – the slowest annual rental increase in five years, according to the latest study by Landbay.
Its rental index found that, despite the capital returning to positive territory over the last two months, there is a synchronised slowdown taking place across the UK.
Rental growth in Scotland, for example, has hit a record low of 0.98% year-on-year, while rental growth in Wales reached its lowest level since June 2015 at 1.60%. However, this is higher than the Welsh average growth rate of 1.49%.
Nonetheless, there are hotspots throughout the UK for rental growth in face of the slowdown. With rental growth of 3.22%, Monmouthshire in Wales topped the growth chart, followed by Nottingham (2.87%) and Conwy (2.71%).
Four of the ten best performing areas were recorded in Wales, while Scotland and England both held three apiece.
On the other end of the spectrum, Aberdeen City and Aberdeenshire were the top two worst-performing spots, while England had seven of the worst performing areas.
“Rental growth across the UK is stuttering,” John Goodall, chief executive officer and co-founder of Landbay, commented. “However, there are signs of a recovering market in London and stronger demand for rental properties.”
He said that despite landlords having a tough time over the past two years – including increased regulatory pressure and significant increase in stamp duty costs – they have managed to shoulder many of these costs without passing them onto tenants.
“With an interest rate rise on the horizon, many landlords that are stuck on variable rates or those looking to reference will likely feel the impact. Therefore, tenants could be hit by rent rises in the near future as landlords look to recover some of the cost.”