The slight seasonal slowdown took hold in London, where rents fell by 0.6%, pulling down the UK average. London’s rental market is particularly sensitive to changes in demand from tenants and often sees a seasonal slowdown as peak tenant demand over the summer eases – usually it hits the rental market earlier than November.
However, rents continued to rise year-on-year in line with wages. UK rents climbed 2.9% compared to November last year, while UK wages are rising at 3.0%.
November’s rent increases were fastest for one beds that are most popular with first jobbers and young professionals (up 4.0% year-on-year), as well as three bed properties, which are often rented by families moving for work (up 3.6%).
Rents have been on a strong upward trajectory since early 2013 and have climbed 7.0% since January 2013 when they stood at £1,206, slightly ahead of wage growth (up 4.8% since January 2013). The rental increase over this period has been led by rent rises for one bed flats, up 8.6% over the same period.
The November data reveals that the southeast dominates the areas with the fastest rental growth – York was the only area from outside the southeast to feature in the top ten rental risers.
John Goodall, co-founder and CEO of Landbay comments: “A seasonal Christmas lull has finally managed to put the brakes on the speedy London rental market. But this is a case of notching down a gear rather than an emergency stop. Rents continue their upward trajectory, albeit at a slightly less frenetic pace. London’s rental market is very sensitive to changes in supply and demand. The November dip is likely to reflect softening tenant demand as new hiring slows in the run-up to Christmas and fewer people move to the capital for work.
On an annual basis rental inflation is tracking wage growth quite closely. Scotland was only part of the UK to see rental growth below 2%. The big picture is that we are in the midst of a housing crisis and that wages are rising – both these facts mean that rents are more likely than not to continue to climb next year.
With house prices rising at the same time it is little wonder that there is such a strong appetite for investments that are secured against British homes.”
