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New findings from the October HomeLet Rental Index have revealed that the rents landlords are charging on new tenancy agreements are continuing to fall across the UK with rental prices dropping in seven out of 12 regions of the country in October 2014.

While rents for new tenancies in October were still higher than in the same month of 2013, HomeLet has now recorded lower rental prices in each of the past three months in many regions, indicating a cooling in the rental market.

Regions that have previously recorded high growth such as Greater London, East Anglia the South East and the South West of England are now recording falling rental prices.

In Greater London, for example, rents levied on new tenancies signed in October 2014 were 3.8 per cent lower than September 2014. In the South East, rents fell 3.1% and in East Anglia prices dropped 5.4%, while the South West saw the biggest monthly drop with rents falling by 9.3%

Meanwhile, in areas of the country where rents have not been rising quite so fast, October saw continued growth. In the North East of England, rents on new tenancies rose by 3.8% in October and in the East Midlands, October's increase was 3.4%.

Martin Totty, Barbon Insurance Group's chief executive officer, said: The divide between areas that previously registered fast-growing rents and those where increases were more modest suggests that the market may be levelling out geographically. All around the UK, landlords continue to make sensible decisions about the ability of tenants to pay rents.

The recent easing in the rental sector mirrors to some extent the autumn cooling of the house purchase market, where house price increases have begun to ease in recent months. However, with house prices having previously increased sharply in most parts of the country and little sign of an improvement in credit conditions, the rentals market looks set to continue benefiting from demand from large numbers of people priced out of buying. Rents may not continue to grow at the pace seen over the past year, but the outlook remains attractive for landlords.

Comments

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    I always take these things with a pinch of salt. This week they say rents are falling, next week they'll be rocketing again. Like with anything, the rental sector is too complex and wide-ranging to fit into neat little boxes. Trying to measure growth and fall in the rental sector is pretty futile, because everyone seems to say something different depending on their agenda.

    • 25 November 2014 10:57 AM
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    Quote: "[i][/i]Regions that have previously recorded high growth such as Greater London, East Anglia the South East and the South West of England are now recording falling rental prices.[i][/i]"

    We are East Anglia based and just about EVERY property which comes round for re-let gets a rental increase and lets - usually - within a week. We manage well over 900 rental properties in our city and the average rent is increasing

    • 25 November 2014 07:43 AM
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