Rental costs in London rose by 0.10% in the 12 months to June 2018, the first annual rental increase in the capital for 18 months, according to the data from the Landbay Rental Index.
Rental prices in London had been sinking on a year-on-year basis every month since December 2016, until finally returning to positive territory in June. The average rent paid for a property in London now stands at £1,884, which is 2.5 times higher than the average for the rest of the UK (£764), despite the tough London market in recent years pushing rents down.
Across the UK, rental growth has continued to slow, a trend that has been seen throughout the first half of 2018, with UK rents rising by just 0.40% in the first six months of the year, or 0.54% if London is excluded. The East Midlands and East of England have experienced the highest levels of growth this year, rising by 0.95% and 0.70% respectively, while the North East has dragged behind with rents falling by -0.08% in the first half of the year.
Looking at rental growth at a county level, Nottingham and Northamptonshire saw the fastest rental growth in H1, at 1.43% and 1.25% respectively. At a London borough level, rents have risen in 25 of 33 boroughs over the course of the last six months.
Landbay CEO and co-founder said John Goodall said: “While there remains a huge degree of regional variation, the overall trend has been a slowing of rents across the UK in the first half of this year. However, much of this has been London weighing down heavily on otherwise resilient growth across the UK. Now that London rents have bounced back to growth this could all be about to change.
“Wherever they’re based, landlords have had to face a myriad of challenges over the past two years, with regulatory and tax changes reshaping the sector. Despite this, there has been little sign of them passing on additional costs to tenants. However, with a rate rise on the horizon, meaning a rise in the cost of borrowing for landlords, we may well start to see landlords increasing rents in the coming months to stay afloat.”
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