Average rents in the UK decreased for the first time since 2012 during the first quarter of 2018, the Deposit Protection Service (DPS) claims. However, the finding is out of kilter with ARLA’s latest report – see next story.
The deposit protection scheme’s latest Rent Index, based on those who have deposits registered with DPS in England and Wales and the Letting Protection Service Scotland and in Northern Ireland, showed the average UK monthly rent reached £772 per month at the end of March.
This was £4 or 0.54% less than the fourth quarter of 2017 and the first annual decline since the end of 2009.
Only four out of 12 UK regions experienced growth in average rents, led by a 3.62% rise in Wales to £594 per month and 1.01% in the South East to £879.
Northern Ireland experienced the biggest percentage decrease of any UK region, down 3.14% to £527, replacing the North East as the most affordable UK region in which to rent property.
London was the most expensive region but saw monthly rents drop 1.39% annually to £1,307.
Julian Foster, managing director at the DPS, said: “The decrease in average rents across the UK could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy.
“Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector.
“The UK-wide decrease implies that there is more at play than a short-term or local correction to excessive prices.”
The report also found annual rent growth in Scotland increased for the first time in three years, being £3 or 0.49% higher in the first quarter 2018 than a year before at £634.
The Scottish figures are just below those reported by lettings agent portal Citylets in Scotland for the first quarter of 2018.
Citylets reported rents increased 1.6% annually in the first three months of 2018 to £780 a month.
Thomas Ashdown, managing director at Citylets, said: “Supply in Scotland’s largest cities is pushing rental prices steadily upwards.
“Whilst the rate of annual growth has slowed in both Edinburgh and Glasgow, they have been rising every quarter for the past seven years in Glasgow and eight in Edinburgh.
“2018 will be a telling year with tax changes and the increasing popularity of short term holiday sites likely to put further pressure on supply.”