Cost of renting in London falls for first time in nearly a decade – should landlords be worried about the supply boom?
The monthly cost of renting a property in London fell for the first time since 2009 in April, latest data from the Homelet index shows.
Rents in the capital dropped 1.7 per cent from March to April meaning typical rent of £1,519, down from £1,546.
It is the third index to highlight that rents in London have fallen in recent times. Data from YourMove at the end of April also pointed towards a sharp fall in monthly costs.
Falls: Both London and the South East saw rents fall on an annual basis
It says that typical rent was £1,203 in March, down nearly £100 a month from a year ago.
Furthermore, rental price inflation across Britain as a whole reduced to its lowest level for seven years in April, according to the Homelet report released today.
This negative growth in the capital, along with a marginal decline in the wider South East region, pushed rental price inflation down.
Rents on new tenancies signed across Britain during April were on average just 0.4 per cent higher than in the same month in 2016 – the lowest figure recorded since February 2010.
April’s rental price inflation means tenants signing up to a new tenancy last month agreed to pay an average rent of £904 a month, or £754 stripping out London.
Homelet data reveals the areas of the country where rents are rising more quickly are those that experienced less rapid rental price inflation during the first half of 2016.
This is when prices in regions such as London, the South East and East Anglia spiked sharply.
In Wales, for example, rents were 2.2 per cent higher in April compared to the same month of last year.
Martin Totty, chief executive of Homelet, said: ‘Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly.’
Your Move says the falls in London reflect the fact many are now looking for rental properties outside of the capital.
Another rental index in March from Countrywide, Britain’s biggest estate and lettings agency, showed rents had their first annual drop for six years.
It says a boom in buying ahead of the hike in stamp duty last year for landlords has bumped up the supply of new rental homes by 10 per cent.
But tenant demand has been falling, especially in London.
It found rents were falling fastest in the capital, with a 4.3 per cent drop in a year.
In London the supply of new homes to let was up 18 per cent but the number of tenants looking had fallen by three per cent.
This morning, an index from Halifax showed house prices fell in the last three months for the first time in nearly five years.
It means the average home value is £219,649, some £2,541 lower than the peak recorded in December 2016.