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UK home rental price growth easing but only after large increases

16 September 2014

Rental price growth across the UK eased in August, with every region seeing smaller rent increases than in previous months, according to the latest index. The average rent in the UK now stands at £921 a month, compared to £851 a year ago, according to the data from the August HomeLet Rental Index, the largest monthly survey of private tenants in the UK. The average monthly private rent in London stood at £1,464 and in the rest of the country £729 although some regions that were previously showing high growth month on month have fallen and in total the average monthly variation in rent across the UK was 2.3%. Only London at 2.4% and the South East at 3%, registered increases of more than 2%. East Anglia and the South West, both of which have been recording strong growth in recent months, have seen a slowdown in August with rents in East Anglia increasing by just 1% and the South West recording a drop in rental prices by 0.9%.   Rents were also lower in Scotland, Wales, the North West and North East of England as well as the East Midlands. The biggest fall in rental prices is in the North West where rents paid for new tenancies last month were, on average, 3.5% lower than those paid on new tenancies in July.   Elsewhere, rents were up by 1.9% in the West Midlands, and by 1% in the East Midlands and Northern Ireland.   ‘August can traditionally be a slower month for the rental market and similar dips have been seen in rental prices in previous years,’ said Martin Totty, chief executive of the Barbon Insurance Group which owns HomeLet ‘Nevertheless, the cooling in the rental sector may prove to represent the beginning of a trend towards a more settled market after several months of much more significant growth. A similar cooling has been seen in the wider housing market, with house price indices recording an easing of house price growth,’ he added.   On an annualised basis rental growth continues to show strength, with only the North East and the East Midlands reporting lower rents for new tenancies in August than in the same month of last year. Across the UK, the average private home rent rose by 8.2% over the year to August 2014. In London, rents were up by 11.4% on a year ago, while East Anglia saw annual growth of 8.4% and the South East 5.3%. ‘While a calmer period for the rental sector is likely to be welcomed by landlords and tenants alike, with affordability concerns having increased in some parts of the country in recent months, demand for rental property is set to remain strong,’ said Totty.   Source – Property Wire

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