British property rents bounced back higher in August after a period of stalling growth, new data released today shows.
Average rents across the UK rose by 2.4 per cent year-on-year in August, according to the Homelet rental price index.
That represented the fastest rate of annual inflation in rental prices since November, Homelet said, as prices resumed their upwards march after pressure briefly eased for renters.
Much of the rise was driven by London rents, which rose by 2.5 per cent year-on-year, suggesting the release of pent-up demand following three successive months of decline. In July rents in the capital fell by 0.6 per cent year-on-year.
The data, collected from new tenancies arranged during the month, show the average monthly rent at £939, while the average rent in the capital rose above £1,600 for the first time.
The figures add to a complicated housing market picture, with multiple house price indicators showing dips in demand, but a low unemployment sustaining rental demand.
Homelet’s chief executive, Martin Totty, said: “Whether the recent strengthening in rents achieved, seen generally across all regions of the country, is driven by more robust demand or by some restriction of supply is hard to judge.”
Policy changes for landlords attempting to buy to let may have contributed to the decline by squeezing the supply of rental properties, according to Adam Challis, head of residential research at property company Jones Lang LaSalle.
He said: “Policies that impacted the viability of buy to let investment may be the cause of sustained rental growth as supply is unlikely to keep up with demand in many local markets.”