Are we seeing the slow death of rent inflation? That’s the question posed by fresh figures from property sector data company Homelet.
It’s latest research for October on the lettings market found average rent in the UK rose by 3% annually compared with October 2015 – a fall from 4.5% inflation seen in March.
While the annual picture remained 2.5% positive in London, the cost of letting a property fell 0.9% from September to October in the capital, the joint most extreme regional readjustment in the country.
Homelet CEO Martin Totty said: “Landlords are aware of the need to find a balance between what tenants can afford and the returns they require on their investment.
“While many landlords are facing higher costs themselves, including the impact of higher Stamp Duty on their property purchases since April, our data suggests they have so far been cautious against a more uncertain economic environment.
“We know wage growth has lagged rental price inflation and it could be we are approaching an affordability ceiling whereby landlords can’t attract tenants able to afford higher rents.
“It’s also a fact the average duration of a tenancy is increasing and our data suggests this has now increased to 28 months on average.
“That might suggest landlords are valuing the security of a reliable tenant and accommodating their wish to remain in the property for longer. This is reflected in the rent asked at each anniversary.”
Homelet’s figures showed the average cost of renting a property in London was £1,542 per month in October – more than £500 more than the national average of £902.
The West Midlands fared best regionally with annual inflation still recorded at 5.1%.
The only region to see annual rent falls in October was Scotland with a drop of 0.4%.
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