Rental price inflation rises in December

by Property 118

5 months ago

Rental price inflation rises in December

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Rental price inflation rises in December

Average rents across the UK rose by 1.7% in December 2017 when compared to the same month a year previously; the average monthly rent is now £907

Rents in the South-East of England were 1.0% lower in December 2017 than in the same month of 2016; rents fell year-on-year in the region during every month of 2017.

The East Midlands saw the highest rate of rental price inflation in December, with rents 4.6% up compared to a year previously.

Rents in the UK rose by an annualised average of 1.7% during December, new data from HomeLet reveals, as the private rental market ended 2017 with rental price inflation moving marginally higher. The average rent agreed on a new tenancy signed in December was £907 according to the December HomeLet Rental Index, compared to £892 in the same month of last year.

Rental price inflation was much more stable over the course of 2017; by contrast, rents in 2016 regularly rose at an annual rate of more than 4% in the first half of the year, before rental price inflation dropped back in the second half.

Rental price inflation remains modest by recent standards. In December 2015, rents were up 3.7% on the same month of 2014, in a year when rental price inflation never fell below 3.5%.

The data for December 2017 also means it is likely that rents rose at a slower rate than general inflation in every month of last year, with inflation on the consumer price index measure running at 3.1% in November, the most recent period for which official statistics are available. The last time that average rents rose more quickly than inflation was December 2016, when the HomeLet Rental Index recorded an increase of 1.7% compared to a CPI reading of 1.6%.

The East Midlands recorded the highest rate of rental price inflation last month, with rents that were, on average, 4.6% higher in December 2017 than in the same month of 2016. Rents in the East Midlands now average £611 a month, remaining lower than most regions of the country other than Wales, and the North East. Rental price inflation exceeded 3% in three other regions last month: the South-West, the North-East and Northern Ireland.

By contrast, the South-East of England was the only region to register a fall in rents last month, with average rents in December down 1% on last year; rents in the South-East fell on an annualised basis in every month of 2017. Rents in Wales were completely flat last month, with every other region of the country seeing at least some increase.

HomeLet’s regional data is available in more detail via an online interactive infographic.

December’s 1.0% increase in rents in London means the capital saw positive rental price inflation compared to December 2016, despite registering falling rents in five months of the year. The average tenancy agreed in London last month cost £1,524, compared to £1,509 a year previously. Stripping out the effect of London rents from the national picture, rental price inflation across the UK would have been 1.9% last month rather than 1.7%.

Rental figures from the December 2017 HomeLet Rental Index

Region Average rent in December 2017 Average rent in November 2017 Average rent in December 2016 Monthly variation Annual variation
East Midlands £611 £615 £584 -0.7% 4.6%
South West £811 £802 £785 1.1% 3.3%
North East £545 £533 £528 2.3% 3.2 %
Northern Ireland £620 £621 £601 -0.2% 3.2 %
North West £686 £685 £670 0.1% 2.4%
Scotland £614 £620 £603 -1.0% 1.8%
Yorkshire & Humberside £624 £624 £612 0.0% 2.0%
West Midlands £675 £675 £662 0.0% 2.0%
East Of England £908 £894 £895 1.6% 1.5%
Greater London £1,524 £1,530 £1,509 -0.4% 1.0%
Wales £605 £610 £605 -0.8% 0.0%
South East £989 £976 £999 1.3% -1.0%
UK £907 £904 £892 0.3% 1.7%
UK excluding Greater London £758 £753 £745 0.7% 1.9%
Notes:

 

Based on new tenancies in December 2017 Based on new tenancies in November 2017 Based on new tenancies in December 2016 Comparison of average rent in December 2017 and November 2017 Comparison of average rent in December 2017 and December 2016



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