Rents in Britain remain below inflation for 11th straight month

The cost of renting a property in Britain increased last month, but rents in London declined for the fifth time this year, new data has shown.

According to figures published by HomeLet, rents in the UK rose by an average of just 0.7% year-on-year last month to £904, marking the 11th successive month in which rental price inflation has lagged behind the general rate of inflation.

With the latest figures from the Office for National Statistics showing that inflation in the UK, as measured by the Consumer Prices Index, currently stands at 3.1%, November's data means that rents have reduced in real terms for almost the whole of 2017.

The last time that average rental price growth exceeded inflation was December 2016, when the HomeLet Rental Index recorded an increase of 1.7% against a CPI reading of 1.6%.

On a monthly basis, average rents fell in 10 out of 12 regions of the UK last month, compared with October, with only the South West and the North East in positive territory. Last month's 0.7% rate of annual rental price inflation compares to an average of 2.8% in November 2016, the report added.

Rents in London declined 0.2% from the corresponding period 12 months ago and 1.7% from the previous month, with the average tenancy agreed in London last month costing £1,530, compared to £1,556 in October.

Stripping out the effect of London rents from the national picture, rental price inflation across the UK would have been 1.1% last month, rather than 0.7%.

The drop was the fifth time this year rents in the capital have declined, but was offset by strong growth in the East Midlands, Northern Ireland, the South West and the North East, which all recorded annual rental price inflation in excess of 3% during November.

By contrast, the East of England and the South East of England recorded a decline of 0.8% and 0.1% respectively.

"So far this year we have seen very modest rental price inflation; rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we last saw during the first half of 2016," said HomeLet's Chief Executive Officer Martin Totty.

"HomeLet's monthly data continues to support a picture of modest increases in rents over 2017 and, in most instances, a reduction in real terms against the backdrop of underlying higher inflation."