The annualised asking rent price has slipped further into negative territory – it’s now 3.7% below the rate this time last year.
This is according to the Homne.co.uk website’s monthly index.
All English regions, Scotland and Wales indicate year-on-year falls in the mix-adjusted average asking rent. The worst performer is Wales with a decline of 11.6%.
Seventeen of the 33 London boroughs indicate positive asking rent growth (up from 13 last month). Kensington and Chelsea is the slowest market with a typical time on the market for empty rental properties of 37 days while Waltham Forest is by far the speediest lettings borough at 12 days.
In the wider sales market, Home says oversupply in the UK property market is creating downward pressure on prices.
Even the formerly top-performing northern regions are now showing sub-inflation growth. The key driver there was buy-to-let investment but, with negative capital gains in real terms and rents now sliding, investment impetus will inevitably wane.
The website claims that the poor state of the wider economy is casting a long shadow. Rising unemployment and the expectation of tax rises in next week’s Budget will erode the number of potential buyers and their buying potential. The market will therefore adjust to these new circumstances, most likely by reducing prices and rents.
The site says: “As we head into the festive period, we can expect significant on-market reductions and more competitive pricing of new listings. Vendors can expect offers to come in below the asking price as buyers increasingly have the upper hand.
“Regarding mortgage rates, there is some reason for optimism. A cut in the Bank of England base rate now appears to be priced in to the 2-year swap rate. This cut is expected to coincide with the MPC’s December meeting where they will be dealing with the aftermath of Rachel Reeves’ Autumn Budget …
“… The Chancellor has signalled that higher taxes on the wealthy will form part of the Autumn Budget package. Full details remain under discussion; officials have indicated that reforms to inheritance tax, capital gains tax, property tax and pensions may all be on the table.
“Uncertainty surrounding the budget and whether there will be a cut in the base rate will likely cause many buyers to hold off until the dust has settled, further adding to the market slowdown. Given that inflation is still running well above the BoE’s target rate, we do not expect anything but the smallest of cuts, if at all.”
Specifically, Home says the mix-adjusted average asking price for England and Wales dropped by 0.4% during October, bringing the annualised growth figure down to a mere 0.4%. Perhaps surprisingly, the North East and Yorkshire indicated the largest month-on-month declines.
Annualised home price growth across England and Wales continues to be outpaced by monetary inflation. Home estimates that overall real growth currently stands at around -4.2%. Even the best-performing regions are now suffering losses of capital value in real terms.
The website continues: “There remains a veritable glut of unsold stock on the market. The total portfolio count for England and Wales is at its highest November reading since 2013. Oversupply is rebalancing the market in favour of buyers.
“Vendor numbers have swelled considerably. October showed the highest number of new instructions for that month in many years. Such a surge suggests that many investors are throwing in the towel. There were 7% more properties entering the market during October this year than in October 2024. The largest surges were in the East Midlands, Wales and the West Midlands (all up 11% year-on-year).”
And it concludes: “In the wake of a spectacular record-breaking summer, the sales market momentum is now plummeting. Notably, this greater throughput has not been sufficient to significantly reduce the unsold stock total. Typical Time on Market (TTM) for unsold properties is trending higher and is currently eight days more than in November last year.”
