Average UK rents fall for first time since 2009 crash with London seeing biggest decline

The North-East of England, the South-East, Yorkshire & Humberside and Scotland all saw decreases ranging from 2.3 per cent to 0.6 per cent

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The Independent Online

UK rents have fallen for the first time in more than seven years with London seeing the sharpest decline, new data has revealed.

The average rent on a new tenancy beginning in May was £901, 0.3 per cent lower than in the same month of 2016. New tenancies on rents in London were 3 per cent lower than this time last year, according to an index from HomeLet, which provides services to landlords and tenants.

Average rent in London was £1,502 in May down from £1,572 a month one year ago, the research found. 

May’s annual decrease is the first since the property market crash in the wake of the financial crisis in December 2009.

Rental price inflation across the UK has been slowing in recent months, having peaked at 4.7 per cent last summer.

Outside the capital, four other regions also saw rents fall: The North-East of England, the South-East, Yorkshire & Humberside and Scotland, with decreases ranging from 2.3 per cent to 0.6 per cent. 

The slowdown in the rental sector follows a third successive month of falling house prices reported by Nationwide last week - the worst run since 2009. 

Nationwide said that the weak pound, which has lost 13 per cent of its value against the dollar since the Brexit vote last June, could be to blame for falling house prices.

Budgets have been squeezed as inflation has picked up and shop price increases have outpaced wages. The building society also said “affordability pressures” may be dragging house valuations down.

HomeLet’s chief executive, Martin Totty said landlords now face, “a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs.

“Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants.”