A gloomy report from The Deposit Protection Service says the UK’s rental market is in recession for the first time since the banking crisis started a decade ago.
The latest figures from The DPS Rent Index show that during the April-to-May period of this year, average monthly UK rent decreased for a second consecutive quarter; this last happened in 2009.
Average rent also fell year on year for the first time since the crisis, falling £10 or 1.3 per cent from £774.
Julian Foster, managing director at The DPS, says: “Following almost a year of low growth, the UK rental market is now in recession in almost every part of the country. On top of this, our prediction last quarter that rents would decline year-on-year in Q2 for the first time since 2009 have proven accurate.
“There are clearly long-term issues with the sector that are having a substantial effect on growth, particularly in the capital, and it’s difficult to see this negative trend ending any time soon.”
These two consecutive quarters in which average rent decreased followed three quarters of low rent growth; and average rent in Q2 2018 was cheaper than it has been since Q3 2016.
Outside of London, average rent during Q2 2018 was £671 - this is £5 or 0.75 per cent lower than a year earlier.
Average rent was lower during Q2 2018 than Q2 2017 in every UK region except Northern Ireland, Scotland and the South West.
Yorkshire experienced the greatest percentage decline in average rent between Q2 2017 and Q2 2018 by 2.95 per cent or £17 from £567 to £550.
London experienced the greatest value decline in average rent between Q2 2017 and Q2 2018 by £36 or 2.73 per cent from £1,326 to £1,289.
During Q2 2018, the North East was the cheapest UK region in which to rent property - £527.
Average UK rent also decreased as a proportion of average UK wage from 32.56 per cent to 32.13 per cent between Q2 2017 and Q2 2018.
The DPS’ report is available here.