Rental price growth at slowest rate in 5 years

Written by Oliver Wade
02/08/2018

Rental prices in the UK, excluding London, increased by 1.18% in the 12 months to July 2018, representing the slowest annual rental increase in five years, according to the figures from Ladbay’s most recent Rental Index.

Despite the rental growth across the UK being in positive territory, there is a synchronised slowdown taking place. While rental growth across the country is 1.18% excluding London, when the capital is taken into consideration, the percentage plummeted to 0.81% - its lowest point since April 2013.

However, the past two months have seen London return to positive territory, with the first annual rental increase in 18 months occurring in June.


Rental growth in Scotland hit an all-time low in July, with prices only increasing by 0.98% year-on-year. This trend continued in Wales, where rental growth reached its lowest level experienced since June 2015. Despite this, as rental growth was at 1.60%, it remained higher than the Welsh average growth rate of 1.49%.

While overall the UK is experiencing a slowdown in rental price growth, there are certain locations that have seen growth, with Monmouthshire leading the pack at 3.22%, followed by Nottingham with 2.87% and Conwy at 2.71%.

However, the top two worst performing locations were both in Scotland; Aberdeen City and Aberdeenshire with an annual percentage change of -4.44% and -4.30% respectively. The index explained that the areas were heavily hit as the local economy was impacted by the drop-in oil prices in 2014, but it has displayed signs of recovery.

Landbay CEO and co-founder John Goodall said: “Rental growth across the UK is stuttering. However, there are signs of a recovering market in London and stronger demand for rental properties. On the face of it, landlords have had a tough time in the past two years from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants.

“With an interest rate rise on the horizon, many landlords that are stuck on variable rates or those looking to refinance will likely feel the impact. Therefore, tenants could be hit by rent rises in the near future as landlords look to recover some of the cost. Brokers can help their clients navigate the impact of an interest rate rise and make sure they have the best deal for their circumstances.”

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