Rents fall for the first time in six years

Average rents in Great Britain have fallen for the first time in more than six years, driven by a sharp drop in the cost of new tenancies in London and the South East of England.

 

Nationally rents fell 0.6% over the last year to £921pcm last month, down £5 compared with February 2016, Countrywide’s latest Lettings Index shows.

 

Renters in London and the South East have been handed a measure of relief, with annual rents dropping by 4.7% and 2.6%, respectively.

 

The fall was triggered by a flood of new rental homes coming on to the market, while demand from private renters fell by 3% in London and 5% in the South East compared with the same period last year.

 

But greater tenant demand in other regions of the country meant that rents continued to increase across all other parts of Great Britain, albeit at a slower rate than in January, led by gains in the East and West Midlands, and when excluding London, Countrywide’s figures reveal that rents rose by an average of 0.8% year-on-year.

 

“Rents are growing in most of the country but falls in London and the South East are dragging down the national growth rate,” said Johnny Morris, research director at Countrywide. “Recent falls in London and the South East are small in the context growth in recent years. Rents are a third higher in London and the South East than in 2007.”

 

He added: “Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south. While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth.”

 

Supply and demand

Source: Countrywide

 

New lets

Source: Countrywide

 

Occupied Homes

Source: Countrywide