Rental growth continues following property market restart in May
The latest rental market data from HomeLet shows that average annual rents increased last month following the market officially reopening on May 13.
Typical rents across the UK rose by 2.7% last month when compared to May 2019. The average monthly rent now stands at £959.
However, on a monthly basis the average UK rent dropped by 0.9% between April and May.
Excluding London, the average UK rent stands at £803 per month, up from £776 in May 2019 and remaining level with the figure recorded in April.
HomeLet reports that on an annual basis, rents rose in 10 out of 12 regions last month. Greater London (-0.2%) and Northern Ireland (-2.1%) were the only regions not to record growth when compared to May 2019.
The highest annual growth was recorded in the North West, Wales and the South West with respective increases of 7.5%, 5.7% and 5.1% between May 2019 and May 2020.
On a monthly basis, it was an equal split with six regions recording growth between April and May and six regions recording a decrease. The highest monthly rise was recorded in Scotland at 2.56%, while the biggest drop between April and May was recorded in Greater London at -4.26%.
The data also shows that average rents in London (£1,598) last month were 67% higher than the UK average (£959) or 99% higher than the UK average excluding the capital (£803).
The HomeLet Rental Index is based on actual achieved rental values for just-agreed tenancies arranged last month, providing an in-depth insight into the lettings market.
"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," explains Martin Totty, HomeLet's chief executive.
He says it’s surprising that rents in regions away from London and the South East have held up well on a monthly basis 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," comments Totty.
"We are 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."
He adds that over the next few months rent may go up and may go down and that the only certainty is uncertainty.