UK rents dipped slightly by 0.4% in November, as the seasonal slowdown took hold in the run up to the Christmas break. The average monthly rent in the UK now stands at £1,290, according to the latest LandBay Rental Index.
This small fall pulled back the annual rate of increase in rents from 3.9% in October to 2.9% in November. However, rents continued to rise year-on-year in line with wages, which are up 3.0%.
In fact, rents have been rising strongly for the last three years, having climbed 7% since January 2013, which is ahead of wage growth (up 4.8% over the same period).
One-bed flats are fuelling the rises, according to LandBay. Rents for these properties are up 4% in the last year alone and 8.6% over three years, as first-jobbers and young professionals look for accommodation close to their jobs and other amenities.
The slight seasonal slowdown took a stronger hold in London, where rents fell by 0.6%, pulling down the UK average. However, Landbay’s CEO John Goodall noted that the capital’s festive slowdown came later than usual this year. He said: “A seasonal Christmas lull has finally managed to put the brakes on the speedy London rental market. But this is a case of notching down a gear rather than an emergency stop. Rents continue their upward trajectory, albeit at a slightly less frenetic pace.
“On an annual basis rental inflation is tracking wage growth quite closely. Scotland was only part of the UK to see rental growth below 2%. The big picture is that we are in the midst of a housing crisis and that wages are rising – both these facts mean that rents are more likely than not to continue to climb next year.”