Average rent in the UK decreased for the first time since 2012 during the first quarter of 2018, The Deposit Protection Service (The DPS) has revealed.
In the latest version of its Rent Index, which is based on data from millions of properties across England, Wales, Scotland and Northern Ireland over the past decade, the average UK monthly rent during Q1 2018 was £772: £4 (or 0.54%) less than Q4 2017 (£776).
The DPS also says that if rents remain unchanged or there is another decline in Q2 2018, the UK will experience its first annual rental decrease since Q4 2009.
Julian Foster, Managing Director at The DPS, said:
“The decrease in average rents across the UK could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy.”
“Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector.”
“The UK-wide decrease implies that there is more at play than a short-term or local correction to excessive prices, and a similar reduction in Q2 could represent the first annual decrease in rents since 2009.”
Northern Ireland experienced the biggest percentage decrease of any UK region: 3.14% (or £17) from £544 to £527, replacing the North East as the most affordable UK region in which to rent property.
As a region London saw an £18 decrease in average rent (falling 1.39% from £1,325 to £1,307): the largest fall in value of any UK region and the second consecutive quarterly decrease for the capital.
As a proportion of salary, rents decreased by 0.18% from 32.63% to 32.45% (using 2017 average wage data; the most recent available).
Only four UK regions experienced growth in average rent: the South East (£9 or 1.01% from £870 to £879), the East Midlands (£3 or 0.45% from £599 to £602), the North West (£1 or 0.18% from £594 To £595) and Wales, which also experienced the biggest growth (£21 or 3.62% from £573 to £594).
Every type of property became cheaper on average to rent, with flats experiencing the biggest decrease (£10 or 1.20% from £796 to £786) in the quarter.
The Index was developed by Professor of Global Economy, Joe Nellis, who was jointly responsible for the research and development of the UK’s leading house price measurement systems, the Halifax and the Nationwide House Price Indexes, and Catarina Figueira, Professor of Applied Economics and Policy, both of Cranfield School of Management.
Copies of the report are available from: www.depositprotection.