Good news for tenants as rents have dropped in the past year

Renting became more affordable in 2018 thanks to a combination of a once-in-a-decade fall in annual rents and wage inflation, according to The Deposit Protection Service.

Last year was the first calendar year since the global financial crisis of 2008 that average rents decreased in the UK, with the percentage of wages spent on rents dropping 0.5 per cent to 31 per cent, the DPS says.

Over the same period wages increased on average by 2.83 per cent, according to government data.

Julian Foster, chief operating officer at Computershare Investor Services, which produces the annual report, says: ”This first drop in average annual rents for almost 10 years is good news for UK renters, especially if wages continue to climb in 2019.”

Average rent in the UK fell by £9 (or 1.17 per cent) from £774 in 2017, to £765 in 2018.  

The biggest annual fall was in Yorkshire and the Humber, where average rents fell by £21 (3.63 per cent) to £546, making it the third most affordable area in the UK after the North East (£529) and Northern Ireland (£544).

Rents in the North East fell by 1.47 per cent, or around £8 compared with 2017, with average rents being around 32 per cent lower than the national average.

Scotland and Wales witnessed modest growth in rents compared with 2017, with Scottish rents rising by a marginal £1 (0.19 per cent), while in Wales rents rose on average by £8 (1.42 per cent).

In England, only the South West and West Midlands experienced annual growth, with the increase equivalent to around an additional pound.

As in 2017, London, the South East, and the East were the only regions last year where annual average rents were above the UK national average.

London continues to have the most expensive average annual rent in the UK, at £1,294, 69 per cent higher than the national average, and representing 41 per cent of average London wages.

Decreases were experienced in average UK rents for all property types, with terraced properties showing the largest decline (2.49 per cent), producing average rents of £711 in 2018.