February’s Countrywide Lettings Index shows that rents in Great Britain have seen their first annual drop since November 2010. Rents across the country were £5 (0.6%) lower than in February 2016, falling to an average rental price of £921 per month. In particular London and the South East saw rents fall by 4.7% and 2.6% respectively, while in contrast the Midlands alongside other regions such as the East of England, Wales and the North saw a rise in rents year on year. The East and West Midlands in particular recording faster rental growth in February than January.
This slowdown is driven by a fall in the number of tenants looking for a home combined with higher numbers of homes available to rent in London and the South East. The surge in the number of homes available follows the rush for landlords to beat the stamp duty last year. The average availability of properties to let across Great Britain year on year has increased by 10% with an additional 5% more tenants looking for homes. In comparison the Midlands saw only 5% availability and the number of tenants looking for properties at 9% in the East Midlands and 3% in the West.
Supply and Demand
Commenting, Johnny Morris, Research Director at Countrywide, said:
“Rents are growing in most of the country, but falls in London and the South East are dragging down the national growth rate. Recent falls in London and the South East are small in the context growth in recent years. Rents are a third higher in London and the South East than in 2007.
“Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south. While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth.”