Rental prices increased in June - but the market has been cooling off during the start of this year

Helen Cahill
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House Prices Widen The North-South Divide
The rental market has been rocked by tax changes this year (Source: Getty)

Rents kept increasing in the three months to June, but there are signs that the growth in the rental market slowed in the first half of 2016 as compared to last year.

The average London renter now pays £1,575 per month, up 3.9 per cent on last year. Excluding Londoners, UK renters pay an average £773 per month, which is 3.5 per cent higher than last year, according to HomeLet.

Read more: Buy to let tax changes knock London luxury rent prices

In May, the growth in rents was 4.4 per cent, suggesting that the rate of growth is now slowing down.

The rental increase in June was relatively modest, and has been decreasing throughout the first half of this year; in June 2015, rents were increasing at an annual rate of 7.8 per cent - and at a rate of 10.7 per cent in London.

Read more: Rents edged down in May as a wave of buy to let properties hit the market

Martin Totty, Barbon Insurance Group's chief executive, said: "The impact of the EU referendum vote will now play out over the months ahead: if as expected, the result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked; all the more so if more people decide to rent while waiting to see what happens to house prices."

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