Rental prices in the UK experienced their slowest growth rate of 2016 in September, according to the Homelet Rental Index.
The firm revealed tenants signing up to new agreements agreed to pay an average of £910 in September 2016.
While this was up 3% on September 2015, it represented a 0.8% reduction in growth when compared to August 2016.
In London, the average rent in September was £1,555 compared to £1,561 in August – a drop of 0.4% but up 3% on last year.
Homelet, a subsidiary of Barbon Insurance Group, said the trend reflected a “modest decrease” in average rents in many areas of the country and could suggest the UK had reached affordability thresholds.
Barbon CEO Martin Totty said: “Landlords are being very careful to ensure rents remain affordable for tenants.
“Despite factors such as higher Stamp Duty on purchases for buy-to-let investors, and the tax changes coming in from April 2017, it would appear so far landlords have absorbed any actual or expected decreases in their yields, rather than pass this on through higher rents.”
Inflation in the private rental sector is now running behind house price inflation and relative affordability of rentals in comparison to ownership has improved.
Martin said: “Whether those impacted can afford to continue to keep rents stable may depend on other variables such as mortgage interest rate movements.
“These tend to be determined by factors such as general inflation outlook and central authority interest rate responses.
“It seems a complex cocktail of external factors could now begin to play a role in determining the future direction of rents in a pre-Brexit economy.”
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