The UK rental market remained in recession during the third quarter (Q3) of 2018, according to the latest Rent Index from The Deposit Protection Service (The DPS).
The study, which is based on The DPS’s database of millions of UK rental properties, found that the average rent price decreased for the third consecutive quarter in Q3, from £764 per month to £761.
Annually, the average rent price has dropped by £14 (1.83%) from Q3 2017, and is now lower than the national average for 2016.
The Managing Director of The DPS, Julian Foster, says: “A third consecutive quarter of declining UK rents signals that there will be no immediate bounce back from the recession that hit the market last quarter.
“This negative period forms part of a slowdown that began in the summer of 2016, which we believe is linked to broader economic factors that are affecting spending power and demand.”
He points out: “Another quarter of lower rents in Q4 2018 would mean the first full year of negative growth since the global financial crisis in 2008 and 2009: a significant threshold for the market.”
Regionally, the East Midlands experienced the greatest decrease (2.47%) in Q3, from an average of £583 a month to £569.
Northern Ireland recorded the greatest rise (2.68%), from £542 to £557, which also represented the region’s second consecutive quarter of growth.
Across the UK, rent prices fell on all property types in Q3, except detached houses, for which rents increased by 0.84%, from an average of £975 to £983.
Terraced houses marked the largest decrease in rent (0.72%), from £709 to £704.
The average rent in the North East remained the lowest in the UK, at £529 per month.
Although the average UK rent is now below 2016 levels, this was driven by the decline in rent prices on flats and terraced houses.
Semi-detached and detached homes still remain above 2016 averages, albeit only just, and a further decrease of just 0.11% in Q4 2018 would see the average rent on semi-detached properties fall back to 2016 averages.