Rents in London have fallen sharply, with new tenants in the capital typically paying almost £100 a month less than their counterparts a year ago, according to a major lettings agency.
London has seen a “sharp fall” in rents over the last 12 months, with the average monthly amount paid dropping from £1,297 a year ago to £1,203 in March 2017, said Your Move, which publishes a regular buy-to-let index. In March alone, typical rents in the capital fell 6%, it added.
The company also reported a decline of 3.7% in rents in south-east England during the month of March, as well as smaller falls in several other regions across the UK.
Your Move said the falls reflect the fact many people looking for rental properties had switched their focus away from London. Nevertheless, the capital remained the most expensive place to rent a property, the company added. The figures, which are based on an analysis of around 20,000 properties in England and Wales, show that the average rent in England and Wales was £800 in March.
Your Move added that the east of England was now the most expensive place to rent a property outside London, at an average of £883 a month, putting it ahead of the south-east (£845). Typical rents in the east of England have risen 7.4% in a year.
The figures broadly tally with data from Countrywide, the UK’s biggest estate and lettings agency, which said in March that rents in Britain recorded their first annual drop for six years.
Countrywide said the buying frenzy ahead of the hike in stamp duty last year pushed up the supply of new homes for letting by 10%, but tenant demand has been falling, particularly in London, possibly as a result of Brexit.
The company also found that rents were falling fastest in the capital, with its figures suggesting a 4.3% drop in a year. In London, the supply of new homes to let was up 18%, it said, but the number of tenants looking for properties had fallen by 3%.
The pace of house price increases has also slowed across Britain, according to the most recent Halifax price index. It said prices in the three months to March were just 0.1% higher than in the previous quarter, adding that the annual rate of growth fell to 3.8% from February’s 5.1%.
A separate index from Nationwide building society also found that prices fell nationally in March. It said the average price of a home fell 0.3% to £207,308 following a 0.6% rise in prices in February.
Some of the frothiest parts of the central London property market have recorded the biggest price falls over the past year. Data from LSL Property Services suggested that the average price of a home in the City of London fell by 10.5% in the year to February 2017, knocking nearly £100,000 off the average price in the district at the heart of Britain’s financial services industry.
Your Move also said that the proportion of tenants in arrears increased month on month. In March 2017, the percentage of households in arrears was 9.05%, higher than the 8.1% seen a month earlier.
Despite this, the company claimed that the long-term trends “continue to be encouraging”. The proportion of tenants in arrears remains below the all-time high of 14.6% recorded in early 2010.