Annual rental growth slowed to 3.1% in August after standing between 3.5% and 3.8% in the previous four months, HomeLet’s Rental Index has found.
Average UK rent now stands at £913 per month, up from £885 in August last year – which HomeLet labelled “sustainable”.
The East of England saw the fastest annual rent growth of 5.8%, followed by Wales (5.2%) and the North West (4.3%), while at the other end of the spectrum rent growth fell by 1.6% in the North East and only rose by 1.0% in the East Midlands.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “The latest HomeLet Rental Index reflects a private rental market in which landlords are engaged in a delicate balancing act: they’re acutely aware of tenants’ concerns about affordability while also conscious of the need to achieve their target yields against a backdrop of rising costs.
“August’s figures suggest that rents are continuing to rise at a sustainable pace – ahead of price inflation, but well below house price increases, which were running at close to 6% according to the most recent data.
“In the medium to longer term, the fundamental driver of rents will be the balance between demand and supply for rented property.
“We expect demand in the private rental sector to continue to grow, in line with demographic changes such as population growth, and as affordability concerns remain in the house purchase market, so it is important that we see efforts to support supply.”