Inflation rises faster than rent and house prices

Inflation continues to climb faster than rent and house rises, Home.co.uk’s latest Asking Price Index reveals.

In August, the annualised rent growth fell deeper into negative territory at -2.2%, a result of rising availability, which is up 12.5% compared with last year.

The downturn is largely linked to London, though Scotland, Wales and nearly every English region except the East Midlands and North East also recorded decreases.

London rents underperform

The report says: “The national growth figure is in the red due mainly to the negative performance of London, but negative contributions also now come from Scotland, Wales and all English regions except the East Midlands and the North East.

“Only 11 of the 33 London boroughs indicate positive asking rent growth and two of those are below the 1% mark.

“In Kensington borough, rents are down by 8.6%.”

Average house price is £361,570

The index also reveals that the typical asking house price across England and Wales slipped by 0.3%, bringing the average to £361,570.

Most regions saw declines, with only a handful showing resilience.

Scotland and the South West recorded the steepest house price reductions.

In England and Wales, annualised growth stood at 0.8%, significantly below inflation, with real growth estimated at -4.7%.

Unsold highest since 2013

However, unsold housing stock levels are still high, hitting their highest September figure since 2013.

This oversupply continues to weigh heavily on pricing.

New instructions rose 11% compared with August 2023 but were 3% lower than a year ago, while demand still outpaces supply.

The North West emerged as the strongest market with a 3.7% annual house price rise, closely followed by Yorkshire at 3.5%.

London was the weakest, posting a 0.5% annual decline.