UK PRS Rental Price Growth Stalls
It was widely expected that UK private rented sector (PRS) rental prices would increase during the course of 2015, due to the lack of available rental properties on the market and continued strong demand from prospective tenants.
However, research by HomeLet found that the pace of rent rises had begun to slow in the three months prior to August 2015. Average PRS rental prices being charged to new tenants were only 1.6% higher than they were at the start of the year compared to the 2.2% rise that had been observed during the three months to August 2015.
PRS rents remain considerably higher than they were when figures are viewed on an annual basis, with average rental prices reaching £992 (GBP) in the three months to August, 10.5% higher than August 2014.
PRS rents in most UK regions are significantly higher than they were compared to the same period a year ago and rental prices are expected to remain slightly more expensive than the cost of a residential mortgage, but they are still predicted to increase further across the whole of the UK by many economists, albeit at a much slower pace than observed during the start of 2015.
Only the North West region recorded lower rental prices for new tenancies in the three months to August 2015 compared to the same period last year.
Wales was the UK region recording the greatest increase in rental prices, up 2.5% in the three months prior to August 2015. However, four UK regions recorded a drop in the cost of average rent for new tenancies during the same period, these were:
- Northern Ireland
- South East
- North West
- North East
Annually, the greatest growth in rental prices was recorded in the South West region, closely followed by Scotland and Greater London, again the North West was the only UK region to record a fall in average rental prices over the course of the year.
It remains to be seen if the slow-down in PRS rental price growth that was observed in the three months to August was just a temporary dip or if it will continue for the rest of the year, either way, the future remains healthy for the UK private rented sector.
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