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Annual price growth slows as rents hit an affordability ceiling

Annual rental price growth in the UK slowed to just 0.9% in October, which was less than half the 2.1% increase recorded a month earlier, according to HomeLet’s latest Rental Index.

Its index, which is based on new lets agreed by landlords and agents using its service, shows that the average monthly rent in the UK hit £909 per calendar month (pcm) in October, up £8 when compared with the corresponding month last year.

On an annualised basis, rents rose in 11 out of the 12 regions of the UK covered by the research.

However, the average rent secured in October was lower than in September in every region, contributing to a significant slowing in the annual rate of inflation.

When compared with new tenancies a month earlier, rents in October actually fell by an average of £18, from £927pcm in September 2017.

The national picture was reflected in London where annualised rental price inflation was 0.6% in October, down from 1.8% and 2.5% in September and August.

The latest data recorded by the HomeLet Rental Index suggests that we may have begun to approach an affordability ceiling, particularly in areas of the country where rental price inflation was previously highest, acting as a reminder that landlords should be mindful of tenants’ ability to pay higher prices.

Rental figures from the October 2017 HomeLet Rental Index

Region

Average rent in October 2017

Average rent in September 2017

Average rent in October 2016

Monthly variation

Annual variation

East Midlands

£618

£620

£596

-0.3%

3.6%

Northern Ireland

£625

£636

£604

-1.7%

3.4%

West Midlands

£683

£692

£663

-1.3%

2.9%

North West

£692

£697

£676

-0.7%

2.3%

Yorkshire & Humberside

£628

£630

£615

-0.3%

2.1%

Scotland

£621

£628

£608

-1.1%

2.1%

North East

£528

£529

£518

-0.2%

1.9%

South West

£790

£814

£777

-2.9%

1.6%

Wales

£612

£617

£603

-0.8%

1.5%

Greater London

£1,556

£1,593

£1,547

-2.3%

0.6%

East of England

£901

£914

£899

-1.4%

0.2%

South East

£977

£1,001

£985

-2.4%

-0.8%

UK

£909

£927

£901

-1.9%

0.9%

UK excluding Greater London

£755

£766

£744

-1.4%

1.5%

Notes:

Based on new tenancies in October 2017

Based on new tenancies in September 2017

Based on new tenancies in October 2016

Comparison of average rent in October 2017 and September 2017

Comparison of average rent in October 2017 and October 2016

HomeLet Rental Index Regional Variance Figures for October 2017

Annual price growth slows as rents hit an affordability ceiling

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