Average rents across the UK rose by 2.4% in August compared to the same month a year ago, the highest rate of annual inflation since November 2016.
Rents rose fastest in the South West of England, up 3.9% compared to August 2016 and Northern Ireland with annual growth of 3.7% and only the South East saw rents fall, down by 0.2%.
The rise takes the average monthly rent to £939 but rents in London have increased by 2.5% year on year to £1,609, the latest HomeLet index shows.
When London is excluded, the average rent in the UK is £776, up 2.3% year on year with rents up in 11 out of the 12 regions of the UK.
The index report points out that August’s increase in average rents was partly driven by a return to inflation in the London market, where rents agreed on new tenancies £1,600 for the first time.
‘While we’ve often observed a seasonal uplift in average rents at this time of year, there’s evidence of a trend now emerging which points to a reversal of the declines seen over the early part of this year,’ said HomeLet’s chief executive officer Martin Totty.
‘Whether the recent strengthening in rents achieved, seen generally across all regions of the country, is driven by more robust demand or by some restriction of supply is hard to judge. Either way, landlords will only be encouraged to invest in property over other assets if they’re convinced they can achieve reasonable returns,’ he said.
‘If not, then the supply of rental properties could become constrained. Many landlords still face further increases in their costs and so will need to find a new equilibrium between their legitimate required returns and affordability for tenants. It seems the elements in solving that particular equation become ever more complex,’ he added.