Wednesday, February 21, 2024

Rents drop 0.9% in December

However, home-lets have climbed 8% over the last year and have risen 19.6% since 2021

UK rents dropped by 0.9% to an average of £1,268 last month, but “this will only provide the slightest breathing space in what continues to be a tough market,” according to data from HomeLet.

Tenant housing costs were down in all UK regions in the month to December, with the exception of the East Midlands, which saw rents increase 0.3%. 

In London, rents dropped 2.2% last month to £2,127, according to figures from the HomeLet Rental Index.

However, home-lets have climbed 8% over the last year and have risen 19.6% since 2021 – the equivalent of over £200 extra per month.

The survey points out that in regions like Scotland and Greater London, these figures have risen by 23.4% and 21.4%, respectively, over the past two years.

It forecasts that tenants now spend 33.4% of their monthly wages on rent, a 2% rise since last year.

In Northern Ireland, this figure has risen by 10.7% in a year, increasing to 38.1% of a renter’s monthly wages spent on accommodation.

HomeLet & Let Alliance chief executive Andy Halstead comments: The New Year starts with restrained optimism, as our records show a minor decline in monthly costs for the second successive month.

So, while we are cautiously optimistic that things can improve for the UK rental sector, it is too early to talk about an upturn in fortunes just yet, Halstead says.

Of course, marginally lower rents put slightly more money in tenants’ pockets and partially lower the possibility of defaults, but the wider landscape is still incredibly challenging for all parties – with little sign of easing, he adds.

Halstead says: Unless we see some dramatic changes, 2024 looks set to bring more of the same. Landlords will have to do battle with a familiar array of struggles, including a lack of stock, increasing costs and prohibitively expensive BTL mortgage rates.

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