Figures from the HomeLet Rental Index found that the average monthly rent now stands at £925, following declines of 0.3% and 0.2% in May and June respectively. These had been the first falls in rents since 2009.
At a regional level Northern Ireland led the way, with average rents up 2.4% in July and up 5.7% on the same month a year earlier. In Scotland, July rents fell back by 1% on the previous month, but were up by 3.6% on an annual basis. In the East Midlands, July rents nudged ahead by 1% on the previous month and by 3.2% on the previous year.
Although average July rents in Greater London (2.6%), the South East (0.9%) and the North East (0.3%) were all up on those recorded in June, they all fell on an annual basis. They dipped by 0.6%, 0.9% and 1.7% respectively when compared with July 2016.
HomeLet’s chief executive officer, Martin Totty said: “It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs.
“This year, that seasonal factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.”
Last year, Totty said the South East was the main driver of UK average rents, but reflected that it was now regions throughout the country leading the strengthening rents.
He added: “We know housing stock for sale is in short supply and the Bank of England has expressed concerns about the credit overhang and lenders’ resilience should economic activity start to slow.
“At the very least, these factors should not be unhelpful to the rental sector in the immediate future, encouraging landlords to stick with property owning as an asset class, with potential still to provide relatively attractive returns compared with alternative investment choices,” he added.