Average rents across the UK increased by 2.1% in September when compared to the same month a year ago taking the average monthly rent to £927, the latest index shows.
Rents in London rose 1.9% year on year, continuing the recovery that began last month after falls throughout the Spring and Summer. The average monthly rent in the capital now stands at £1,593.
Overall, the data from the HomeLet September rental index reveals that rents rose in 11 out of the 12 regions of the UK covered by the research
Only the South East of England recorded a negative rate of annual rental price inflation, down by 0.1%. The highest annual increases was in Northern Ireland with a rise of 4.3%, followed by a rise of 3.9% in the West Midlands and 3.7% in the East Midlands.
Rents rose in London, for the second month running after a four month period in which annual rental price inflation had slipped into the red. Rents in the capital were 1.9% higher last month than in September 2016, with the average tenancy agreed in London last month at £1,593.
Overall, month on month it was more of a mixed picture with rents down in most regions compared with August. The biggest monthly fall was 2.9% in the South West, followed by 2.6% in the South East, 1.7% in the North East and 1.4% in Wales.
Rents also fell on a monthly basis in by 1.3% in the East of England, by 0.9% in the North West, by 0.5% in the East Midlands, by 0.3% in Northern Ireland, by 0.2% in Scotland, by 0.1% in the West Midlands and were unchanged in Yorkshire and Humberside.
According to HomeLet’s chief executive officer Martin Totty, the data signals the re-emergence of an upward trend in rents. ‘It wouldn’t be surprising if landlords, seeing their own current and anticipated cost increases, seek to pass these costs on to tenants to preserve the returns from capital they have invested in residential property assets,’ he said.
‘Landlords are facing a deluge of higher costs from new regulation, taxation changes on buy-to-let mortgages and the prospect of a near term rise in interest rates. There’s also the added uncertainty over the fall-out from the Government’s intention to ban letting agents from charging upfront fees to tenants,’ he explained.
‘In a sector where demand for rental properties generally outstrips supply, most informed commentators suggest higher externally imposed costs on landlords will inevitably translate into higher rents to tenants. This may prove to be the start of that upward movement, especially if tenants are left competing for fewer rental properties because some landlords decide the returns from property investment are being eroded by factors beyond their control,’ he added.