Rents across the UK continue to retreat from their 2023 highs, falling by 2.9 per cent over the last three months, a leading index says.
These falls have trimmed the annualised change to 5.0 per cent according to the website Home, which publishes a respected monthly market snapshot.
The North West remains the regional leader in rental growth at 16.9 per cent year-on-year while Greater London continues to be the worst-performing region suffering a 2.1 per cent fall year-on-year due to an oversupply of property to let.
However, some parts of the capital are still seeing huge rises. Barking and Dagenham, and Hillingdon, have seen 22.2 and 13.6 per cent annual rises respectively. But Home says growth is becoming increasingly negative overall and rents are falling in the more expensive central boroughs.
A total of 12 prime boroughs now show year-on-year falls in asking rents, up from 10 last month. The worst performer is Kensington and Chelsea with a year-on-year fall of 15.5 per cent.
In London, Home says rental supply has been on the rise for the best part of a year and now oversupply is the problem. During the last month, 37.9 per cent more properties to let have appeared on the market than during December 2022. The obvious outcome of this trend will be to drive rents down further, the website predicts.
The Home website goes on to criticise London Mayor Sadiq Khan and his frequent pleas to government to be given the power to impose rent controls on the private sector.
Home says: “The market is simply doing its job. Covid caused a huge distortion and the exodus reversal had a massive whiplash effect on rents. Now we are in the price correction phase. Unsustainable sky-high rents will be crushed by the supply tsunami until a new balance is found by Adam Smith’s famous ‘invisible hand’.
“Some politicians, such as Sadiq Khan, would like to use this market distortion, brought about by an unprecedented pandemic, as an excuse to impose rent controls in London. Clearly, this measure would be counterproductive in that it would scare off landlords and never allow the market to solve the problem of high rents.
“Supply would waste away, as it did during the rent control era of the 1970s, making life much more difficult for tenants and landlords alike.”
