In England, private rental prices grew by 1.9%, Wales saw growth of 1.1% while Scotland saw rental prices increase by 0.2% in the 12 months to June 2017.
As with the house purchase market, London’s rental market appears to be seeing a slowdown in prices.
London private rental prices grew by 1.3% in the 12 months to June 2017, 0.5% below the national 12-month growth rate.
Between January 2011 and June 2017, private rental prices in Great Britain increased by 14.8%, strongly driven by the historical growth in private rental prices within London. When London is excluded, private rental prices increased by 10.8% over the same period.
Price slowdown
Growth in private rental prices has seen signs of a slowdown since the end of 2015, increasing by 1.8% in the 12 months to June 2017, the ONS noted.
For example, a property that was rented for £500 per month in June 2016, which saw its rent increase by the national average would be rented for £509 in June 2017.
This slowdown is mainly driven by a market lull in London over the same period.
The slow steady increase may ease fears that rents will soar due to a lack of available housing stock, although Landbay CEO and co-founder John Goodall (pictured) warned there was still need to build more properties to rent as well as to buy.
“While the pace of house price growth may have slowed, house prices still continue to rise, ultimately meaning that fewer people can afford to buy, which can only place greater pressure on the UK’s rental sector,” he said.
“For that reason it’s essential that new construction is planned across all tenures, so that rents don’t escalate to the point where they’re inhibiting aspiring homeowners’ ability to save for a deposit.
“Quite simply, we need to build more purpose built rental homes to support those hoping to take their first steps onto the property ladder,” he added.
