The most recent report from Landbay has shown that UK rental growth rather flat-lined during May.
Rental growth increased by 0.02% over the month – the slowest pace in more than half a decade. In addition, this was a fraction of the five-year average growth total of 0.14%.
The capital continues to be the main region driving the slowdown. Rents in London dropped by -0.94% year-on-year to May, in comparison to growth of 1.62% for the rest of the UK.
Rents have now slipped for a whole year in London – a 12 month decline in demand but greater supply- with homeowners opting to rent out properties until the sales market picks up.
In fact, London was the only region to see rents fall in May, with seven of twelve regions ending the month with a slower rate of growth than in April.
Rental growth was subdued in May
John Goodall, CEO and founder of Landbay, observed: ‘The election is one of many external factors influencing activity in the buy to let market at the moment. Yes, uncertainty about the future of the UK will cause some people to delay a decision to move, but affordability pressures are also starting to pinch the pockets of renters across the country. Wage growth is now lagging behind inflation for the first time since mid-2014, and with less money to spend on such a major monthly outlay, renters will be factoring this into their tenancy decisions.’
‘On the supply side, a wave of new rental properties caused by last spring’s hike to Stamp Duty, together with falling house prices, will no doubt both be playing a small part in the ongoing softening of rental growth. Nevertheless, barring a major surprise from either the election or the Brexit negotiations, long term population and construction trends suggest that rents will soon be growing faster than inflation again,’ Mr Goodall added.