United Kingdom rents fall for first time in six years

United Kingdom rents fall for first time in six years

Rents are a third higher in London and the south-east than in 2007.

The average monthly cost of a rental fell 4.7% in the year to February from £1,309 to £1,246 (US$1,518), according to a report out Sunday from real estate consultancy Countrywide.

'Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, people rely on a well-served buy to let market to ensure rental growth doesn't become unbearable, ' he explained.

The reason? Well, the folks at Countrywide reckon it's down to a recent increase in the number of rental properties available in London, which is partly due to landlords rushing to buy property before a 3 percent stamp duty surcharge came into effect a year ago.

Average rents in the London boroughs of Kensington and Chelsea, Westminster and Camden have seen the most significant fall over the last 12 months, down by 3.5%, 2.23% and 1.79% respectively. In all regions but London, rents have continued to rise, with an average increase of 0.8% year-on-year. It was the first fall since November 2010.

Outside of London and the south east, rents rose 0.8 per cent year-on-year, but the rate of growth slowed in nine of the eleven regions in Britain.

"Economic and housing sentiment - both in sales and rental markets - has been affected by our vote to leave the European Union, in London more than anywhere else", said Johnny Morris, research director at Countrywide, according to The Guardian.

As for predictions, a lot depends on where in the country you're looking.

'Early signs point towards 2017 being a rare year when rents rise faster in the north of the country than in the south'. With the exception of London, rents in England saw the top rate of growth, reaching 1.92%. "That is likely to limit rental growth", Morris said.

While in Great Britain there were 5% more tenants looking for a home than at the same time as last year, London (-3%) and the South East (-5%) both had fewer tenants looking than last year.

The surge in the number of homes available to rent following the rush to beat the stamp duty deadline is now beginning to subside. Earlier this month a government study showed that home ownership in England has fallen to its lowest level for 30 years, while the private rental sector has doubled in size since 2004.

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