According to the latest LSL Property Services rent survey, rents fell in November for the first time in 8 months, dropping by 0.4%, but are still 3.4% higher than in November 2011. The fall in England and Wales has returned prices to the same levels recorded in September.
The survey measured asking price rents, finding that the average rent last month was £741.
The greatest fall in rents was seen in the South-East, where rents dropped 1.9%. This was the first monthly fall that area has experienced since February.
Rents in the West Midlands fell 1%, while rents fell 1.1% in the North-West. Wales and Yorkshire and the Humber experienced the fastest monthly rise, while London rents went up just 0.2%.
On an annual basis, rents are higher all across the UK, except in Wales. London experienced the highest rental growth, with rents 6.9% higher than last November, hitting a new peak of £1,104.
According to LSL estimates, the total amount of rent late or unpaid fell to the lowest level since June 2010, with total arrears of £241m, down from £265m in October. This equates to 7.4% of all rent across England and Wales.
David Newnes, director of LSL, said, “Landlords look to avoid having properties empty over the Christmas period, and are often more flexible on pricing at this point in the year.
“But the rental market has not ground to a halt by any means. The housing market is still haunted by the demons of undersupply of new homes and tight credit conditions for buyers with the smallest deposits, which is pushing up tenant demand.”
Meanwhile, a new analysis of rental data by Belvoir has shown that rents have fallen across the UK by an average of 2.4% since 2008, the start of the credit crunch.
Belvoir believes it gives a much more accurate view of the national UK rental market than other reports which focus mainly on the rapidly growing rental areas such as London and the South-East.
Belvoir CEO Dorian Gonsalves commissioned an independent analyst, Kate Faulkner, to study advertised rents going back almost five years in Belvoir offices across the UK.
Gonsalves said: “The Belvoir five-year rental index, which analyses advertised rents on a simple three-month average, is an important and definitive study, which crucially and unlike many other studies has been tracking data since March 2008 – six months after the credit crunch started.
“We have also been able to track rental figures from 139 offices across the UK, and break our analysis down into national, regional and county levels.
“This rental index report is very much aimed at helping landlords and tenants understand the rental market and how it is currently operating right across the UK rather than in pockets of London and the south east.
“We also hope that the Belvoir rental index, which will be released on a monthly basis during 2013, will assist government bodies in understanding the market and enable them to incorporate this information into their policy and decision-making processes.
“Every few months we read media reports of rising rents in different parts of the country, which can raise expectations and be very confusing for those investment landlords whose rents have shown little or no increase since the credit crunch began.
“Our figures confirm that the rental market is still very much on the road to recovery, with UK rents down by around 2.4% compared to the heights of five years ago.
“However, it also shows that the rental market is working well, with rents keeping in line with affordability.
“Landlords should be aware of how their rental income is tracking versus rents at a local level and whether they are keeping up with inflation. It is important to secure the right balance between investing money to keep properties well maintained and minimise voids, but to also be aware of relevant local market factors and know when to increase rents so that they are in line with inflation.”
According to their report, the average monthly rent in the UK in 2008 was £705, while the average for 2012 was found to be £682, a lower figure than is produced by most other rental surveys.
The average rent then, has decreased by £23. However, if rents had risen in line with inflation, tenants would have been paying £113 more per month.
The average rents in Wales have remained stable in the last 12 months at around £600 per month. Yorkshire, the East Midlands, East Anglia, and the North-West are yet to recover to September 2008 levels as of September 2012. The West Midlands and Scotland have just about recovered, while rents are rising above 2008 levels in the South-East, South-West, North-East, and London.