The average monthly private rent in the UK (excluding London) now stands at £729 with the average rent in the capital £1,464, according to the latest Homelet rental index.
The August index showed that rental price growth across the UK eased in August, with every region of the UK seeing smaller rent increases than in previous months. The data has also shown some regions that were previously showing high growth month-on-month, have fallen in August.
This month’s data from the index shows that rental increases were significantly lower than in previous months – with only London (2.4%) and the South East (3%) registering 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 England as well as the East Midlands. The biggest fall in rental prices is in the North-West of England, 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.
Commenting on the report, Martin Totty, Barbon Insurance Group’s chief executive officer, said: “August can traditionally be a slower month for the rental market and similar dips have been seen in rental prices in previous years. 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.”
On an annualised basis, however, 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. In London, rents were up by 11.4% on a year ago, while East Anglia (8.4%) and the South-East (5.3%) have also been strong performers. Across the UK, the average UK private home rent rose by 8.2% over the year to August 2014.
“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.