Rents in London have fallen for the first time in eight years as the buy-to-let market continues to cool.
This is according to data from insurance firm HomeLet, which showed rents on new tenancies in London declined by 1.2 per cent in April compared with the same month a year ago - the first such fall since December 2009.
Falling rents in the capital, along with a marginal decline in the south east, pushed down the average UK-wide rental inflation to 0.4 per cent – the lowest level for seven years.
Wales witnessed the biggest increase annual increase in rents (2.3 per cent), with the north east, Scotland and Northern Ireland all seeing increases of 2 per cent or more.
April’s rental price inflation means tenants signing up to a new tenancy last month agreed to pay an average rent of £904 a month, or £754 excluding the Greater London region.
In London, the average rent now stands at £1,519 – down from £1,537 the previous April.
Rental figures from the April 2017 HomeLet Rental Index
| Region | Average rent in April 2017 | Average rent in March 2017 | Average rent in April 2016 | Monthly variation | Annual variation |
| Wales | £610 | £616 | £597 | -0.90% | 2.30% |
| North East | £525 | £522 | £514 | 0.60% | 2.20% |
| Scotland | £632 | £610 | £618 | 3.60% | 2.20% |
| Northern Ireland | £614 | £614 | £602 | 0.10% | 2.00% |
| South West | £802 | £798 | £787 | 0.50% | 1.80% |
| East Midlands | £604 | £602 | £598 | 0.30% | 1.00% |
| North West | £677 | £675 | £671 | 0.40% | 0.90% |
| Yorkshire & Humberside | £619 | £619 | £614 | -0.10% | 0.80% |
| East of England | £904 | £902 | £898 | 0.20% | 0.70% |
| West Midlands | £661 | £663 | £658 | -0.30% | 0.40% |
| South East | £1,003 | £997 | £1,007 | 0.60% | -0.40% |
| Greater London | £1,519 | £1,546 | £1,537 | -1.70% | -1.20% |
| UK | £904 | £904 | £900 | -0.10% | 0.40% |
| UK excluding Greater London | £754 | £751 | £748 | 0.40% | 0.80% |
| Notes: | Based on new tenancies in April 2017 | Based on new tenancies in March 2017 | Based on new tenancies in April 2016 | Comparison of average rent in April 2017 and March 2017 | Comparison of average rent in April 2017 and April 2016 |
Martin Totty, chief executive of HomeLet, said: “Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly.
“We continue to see landlords and letting agents weighing tenant affordability considerations very seriously.”
Mitch Hopkinson, director at London-based deVere, said Brexit, as well as the government’s buy-to-let changes, is having a negative effect on the London market.
He said: “If you live in the European Union, surely there is a question mark as to whether or not you will be welcome in the future.
“People will give it a wide berth and go somewhere else.
“People in London now might be thinking about what sort of future they have, too. Perhaps they will go to shorter leases. There is a lot more of this to come.”
simon.allin@ft.com
