New data from Hamptons International reveals that in June the average rent on a newly let property in Britain dipped 0.6 per cent below this time last year.
This marked the first annual fall recorded by Hamptons since February 2014 and a deceleration in rental growth from pre-lockdown times when rents were rising at an annual rate of 1.2 per cent earlier this year.
In June 2020, rents fell in four out of 11 regions monitored by the agency, with London recording the biggest decline.
The average rent of a newly let property in the capital dropped 4.5 per cent year-on-year in June, the biggest decline in six years.
This was led by a 7.4 per cent year-on-year fall in Inner London, marking the biggest decrease on record and all but wiping out last year’s rental growth of 7.5 per cent.
Meanwhile rents in outer London decreased 3.6 per cent year-on-year in June.
However if London is excluded rents continued to rise across the rest of Britain by an average of 1.3 per cent annually.
Increasing rental growth in the Midlands (2.9 per cent) and the North (3.0 per cent) outweighed rent falls in the South East (down 2.2 per cent), the North East (falling 0.7 per cent) and the East of England (dipping 0.2 per cent).
The North West recorded the strongest rental growth of 5.2 per cent, which is the highest rate of growth recorded in the region since November 2016.
Aneisha Beveridge, head of research at Hamptons International, comments: “Rising stock levels in the capital, particularly in Inner London, combined with falling demand from new applicants caused the record falls.”
She adds: “The effect of lockdown has resulted in fewer international tenants, particularly students, as well as an increase in the number of London tenants leaving the capital.
“However the flexibility renting offers has boosted demand in the Midlands and North. Rents in the three combined Northern regions rose 3.0 per cent in June, six times the rate recorded in the same period last year.
“While the stamp duty changes … are most likely to benefit landlords looking to buy in London and the South, higher yields will continue to entice investors further North. Any additional increase in rental stock in London could put more downward pressure on rents.”