Mixed picture as rents rise 2.7% in the last year, but down 0.9% month-on-month

Average rents across the UK increased by 2.7% in May when compared to the same month last year, according to the latest data and analysis from Homelet.

But the average rent across the UK dropped in May by 0.9% compared to April to hit £959 a month, the figures show. 
 
The rental data reveals wide regional variations across the country, with rents increasing in the last year in 10 out of 12 of the regions covered by the research.

In London, rents were down by 0.2% in May 2020 versus May 2019; the average rent in the capital now stands at £1,598 a month.

Martin Totty, chief executive at HomeLet, commented: “The Index returns this month on the back of a marked pick-up in the number of new tenancies agreed during May, providing a forward-looking view of actual rents being achieved. 

“This month’s data is both surprising and yet not surprising. It is surprising that in many regions of the country, especially away from London and the South East, rents have generally held up well month on month and are commonly ahead over the year as a whole.

“Not so surprising is evidence of a softening in rents in the short term in the higher average rent regions and, for the first time in almost three years, a negative movement in London compared with a year ago - and a much bigger drop from the prior month.

“We are clearly in unprecedented times and predicting even the next few months seems fraught with risk - any ‘risk’ and attitudes to it, would seem likely to be a dominant theme for all actors in our sector for the foreseeable future. Rents may go up or they may go down and defaults may follow the same pattern.

“Nobody can be sure other than there is one certainty, and that is there is now more uncertainty. Landlords, together with their letting agents, will want to insulate themselves from this greater uncertainty and protect their rental income via specialist insurance cover agents can arrange for their benefit. 

“June’s HomeLet Rental Index will provide another data point to evidence if we have a new trend line and the direction of travel is different to the one we’d grown accustomed to over recent times.”

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