Average advertised rents increased in October
Eight regions have seen less than a 1% growth in advertised rental prices in the last month with an average increase of £5.79 per month. These regions have experienced stable growth and look to continue this for the foreseeable future.
Robin King, director, Move with Us, said: “Average advertised rental prices have remained relatively flat and we are unlikely to see significant increases now until the New Year.
“People tend to change jobs and make new plans at this time, which is often a key driver of demand for rental properties.’’
Advertised rental prices in London continue to experience steady growth, increasing 0.99% in October alone. This trend suggests that sustained growth in London is likely in the medium term. London remains the most expensive place to rent with average advertised rental prices now at £2,300 per month.
The North East is the surprise success of this month with advertised rental price increases accelerating by 5.35%. This is the largest absolute price increase at £34 compared to the £22 per month increase in Greater London. However, house values in the North East are falling.
East Anglia and Scotland
Advertised rental prices fell in East Anglia and Scotland in October though they remain within 1.2% of last year’s prices. Asking rents in these regions have fluctuated around the same level for nearly two years, suggesting that this is a temporary condition and a return to price growth is expected in the medium term.
Yorkshire and Humber
Yorkshire and Humber appears to have peaked after accelerated growth throughout Q3. Advertised rents fell by nearly 1% but this should be a temporary setback, with long-term growth projected.
King added: “The North East was the star performer in October with rents increasing by more than 5%. Rental yields look set to improve as house values in the region fall.’’
The annual rate of advertised rent price inflation was 2.85%, giving a real increase of 0.65%, taking into account 2.2% RPI inflation. Prices in the East Midlands, Yorkshire and Humber, and the North East increased by over 3% in real terms in October.
Rental property looks to provide an effective hedge against inflation in the medium term.