Rents climbed both month-on-month and year-on-year and across the UK last month, with the only exception being Scotland, which saw a marginal monthly fall of 0.1 per cent to £696.
Rents increased every month in 2014 and have been strong this year, seeing only small month on month decreases between June and August before increasing again in September and October, according to the statistics powered by MIAC.
The last time there was a sustained period of falling rents was in the winter of 2012/3, when rents saw monthly falls from August 2012 to April 2013.
Typically an autumn seasonal slowdown in the rental market is caused by lower tenant demand after heightened demand in the summer from students, first jobbers moving for work and the expiry of annual contracts that originated in previous summer rental rushes.
The fact this did not happen last year and shows no signs of arriving this year demonstrates the UK private rental sector is seeing a period of consistently high demand and insufficient supply of properties, stated Landbay.
Yesterday, Rightmove’s November update showed that this month has seen the smallest drop in new seller asking prices (minus 1.3 per cent) since 2011, during the traditional seasonal slowdown.
Increases in the UK are being driven by London and the southeast, with rents up by 4.1 per cent to an average of £2,063 in the former and up by 3.4 per cent to £1,033 in the latter.
Of the top 20 areas of the UK outside of London to see the fastest rent increases, just Aberdeen, Edinburgh and Bath were outside of the southeast.
John Goodall, co-founder and chief executive of Landbay, said the fact that seasonality appears to be declining in influence is a powerful sign of the increasing strain the private rental sector is under to house the UK population.
“The simple fact is that more people are renting for longer and there aren’t enough properties to meet demand. Now that the economy is improving and wages are rising, people are willing to compete for rental properties, pushing up prices.
“The almost uninterrupted monthly rental increases we have seen since spring 2013 show that residential property is a resilient asset class that has performed exceptionally well during a period of low inflation.”
Joe Macklin, director at MIAC, added that the underlying data suggests that October is the first month in the run up to Christmas where there is a notable fall in supply, however, prices show little sign of falls so the demand must be remaining buoyant and hence we currently see no seasonal variation.
“This arguably emphasises the high degree of undersupply in housing stock which has been underlined by the recent Royal Institute of Chartered Surveyors survey.”