Rental growth subdued in UK, up just 1.1% year on year
Rents paid by tenants in the private rented sector in the UK increased by 1.1% in the 12 months to February 2018, unchanged from January, the latest official figures show.
In England rents were up by 1.1%, in Wales by 1.4% and in Scotland by 0.4% while growth as more subdued at just 0.1% in London, according to the figure published by the Office for National Statistics (ONS).
The minute growth in London was the lowest annual rise since September 2010 and if London is excluded from the calculation, then the national rent figure increased by 1.6%.
The annual growth in Wales is still higher than the annual rate of change for England and overall Wales has shown a broad increase in its annual growth rate since July 2016.
Rental growth in Scotland was up slightly from the 0.3% annual growth recorded in January and the ONS report says that this continued weaker growth may be due to historical stronger supply and weaker demand in Scotland.
In England the largest annual rental price increase was in the East Midlands with growth of 2.5%, down from 2.6% in January, followed by the South West up 2.1%, unchanged from January, and the East of England up 2.1%, up from 1.9% in January. In the North East annual rent growth was static compared to January.
Between January 2011 and February 2018, private rental prices in Britain increased by 15.6%, strongly driven by the historical growth in private rental prices within London. When London is excluded from these figures, private rental prices increased by 12.1% over the same period.
The figures reaffirm how subdued private housing rental statistics have been in the last few months, according to Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA).
‘Whilst that may be giving tenants some temporary respite from higher rents, the flipside is that landlords will be facing downward pressure on their cash flows and profitability. This comes at a time when successive policy changes in the buy to let sector have proved detrimental, with net buy to let investment falling by 80% since 2015,’ she pointed out.
‘We are already concerned that availability of private rental homes is unlikely to keep up with household numbers. We therefore ask the Government to recognise the benefits that a strong Private Rented Sector (PRS) brings for the UK, and the importance of maintaining a good supply of rental properties for the periods when home ownership is not suitable or achievable for households,’ she added.