Rental growth on newly let properties
The gap between what’s happening in the rental market in Inner London compared with the rest of the country has widened. Rents in Great Britain as a whole remained flat in July. Last month, the average cost of a newly let property in Great Britain fell slightly to £1,001 pcm, 0.1% lower than the same month last year. However this is a slight improvement on the 0.7% year-on-year fall recorded in June.
Once again, rental growth is being dragged down by rent falls in London, the South East and East of England. Rents in London fell -4.2% year-on-year in July, driven by a -8.4% decrease in inner London. The increase in the number of short lets moving to the long-term rental market in inner London drove a 42% annual increase in stock levels and consequently lead to a record fall in rents.
While in outer London, rents fell -2.9% compared with the same period last year, a slight improvement from the -3.6% fall recorded the previous month.
However outside of London and its immediate neighbouring regions, rents continued to rise. While affordability pressures weigh on rental markets across the country, the lack of stock available is softening the blow. The South West saw the biggest rental increase – average rents here rose 2.8% year-on-year in July. The Midlands followed with 2.3% annual rental growth.