Average UK residential rents have fallen for the first time since 2009, with the steepest falls recorded in London, according to data published today.
The slowdown in rents reflects a similar situation in the wider housing market, where property prices have fallen for three consecutive months.
According to figures published by HomeLet, which provides services to landlords and letting agents, the average monthly rent on a new tenancy beginning in May was £901, down 0.3% on the same time last year when the average rent was £904.
London saw a greater fall, however, with rents down 3% on last year, from £1,572 to £1,502. This amounts to new tenants in the capital paying £70 per month less than those who began their tenancy last year.
Average rents on new tenancies also fell in four other regions, the North East, South East, Yorkshire and Humberside, and Scotland.
Martin Totty, chief executive of HomeLet, said; “Landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs.
“Any constraints to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow.”
The fall in rents is likely to add to existing concerns that landlord’s incomes could be hit by the roll out of Section 24. Under Section 24, landlords will be taxed on their gross monthly income before they make any mortgage repayments.
A combination of falling rents and higher tax bill could threaten the financial viability of some landlord’s properties.