Nine out of 12 UK regions have recorded higher rental prices in November 2014 compared to the same month last year, even accounting for a 0.6% decrease in UK average rental prices since October 2014.
Regions that have experienced the highest growth compared to this time last year include Scotland, Greater London, and the West Midlands, with rental prices 11.7%, 11% and 8.7% higher than this time last year, respectively.
Despite the strong annual comparison figures, the HomeLet Rental Index has recorded an ‘autumn dip’ in rental prices, with rents agreed on new tenancies falling in the majority of UK regions in September and October this year.
This month, that trend continues with all regions of the UK with the exception of Scotland, the East Midlands and the South West recording lower prices in November than in October 2014.
Scotland recorded a monthly increase in rental prices of 8.7%, with the East Midlands and the South West recording monthly increases of 1.5% and 1.4% respectively.
The recent dip in prices reflects typical seasonal movement in the rental market and sits within the context of a market that remains strong.
Annually, only three regions of the UK recorded lower rental prices in November 2014 compared to the same month last year: the North West dropped -3.6%; the North East -2.5% and Wales -2%.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “We see the autumn’s moderation in rental growth as broadly in line with the typical seasonal effect that often sees rental prices balance or even slip into reverse in many areas of the country at this time of year.
“The outlook for the private rented sector remains positive for several reasons – the pace of housebuilding is unlikely to have a significant effect on the supply of property to buy or to rent in the short term, high house prices, and a mortgage market where lending criteria remains constrained, are combining to ensure that the demand from tenants needing rented accommodation remains strong.
“In terms of seasonal highs we see Scotland bucking the trend of the rest of the country, the rapid growth in the Scottish rentals market reflects the strength of the economy north of the border – particularly in oil-rich Aberdeen, which has a thriving rentals sector, but also in other Scottish cities and throughout the country.
“A report published this week shows Scotland now has the highest employment and economic activity rates – and the lowest unemployment rate – of the any of the four nations of the UK.”