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UK rental price progress has slowed from its report excessive, suggesting the disaster dealing with tenants has handed its peak, official figures present.
Common personal rents elevated by 8.9 per cent within the 12 months to April, down from a peak of 9.2 per cent within the 12 months to March, the Workplace for Nationwide Statistics mentioned on Wednesday.
The information additionally indicated UK home costs are exhibiting indicators of restoration after a interval of decline, with an increase of 1.8 per cent within the 12 months to March. This marked an enchancment on the 0.2 per cent fall in February and the primary annual improve in costs since June. In March, the common home value stood at £283,000.
“After two years of unprecedented and generally accelerating annual growth, private rental price rises showed tentative signs of easing,” mentioned Grant Fitzner, ONS chief economist.
“Most nations and English regions saw a slowdown, with a notable easing in London,” he added.
Rental value progress surged from about 1 per cent in 2021 to a report excessive in March 2024, reflecting rising borrowing prices which have made it troublesome for a lot of households to purchase property and boosted rental demand.
The quick rise additionally mirrored landlords passing on greater borrowing prices to tenants. Nonetheless, mortgage charges have eased from the 2023 summer season peak, serving to the property market to recuperate.
Separate information revealed on Wednesday confirmed UK inflation fell lower than forecast to 2.3 per cent in April, prompting markets to delay their expectations for when the Financial institution of England will begin slicing rates of interest from the 16-year excessive of 5.25 per cent.
Rents in London averaged greater than £2,000 per thirty days — a rise of £350 from April 2021 — far greater than in every other space, and greater than thrice the common rental price of £666 within the North East.
London additionally registered the quickest rental rise within the nation, at 10.8 per cent. Nonetheless, the annual charge of progress was beneath the 11.2 per cent in March — the best because the sequence started in 2006.
Home costs within the capital fell 3.4 per cent within the 12 months to March, making it the worst performer within the nation and the one space to report a fall aside from the South East, the place costs dropped 1.3 per cent.
London’s home costs proceed to underperform the remainder of the UK, reflecting an absence of inexpensive housing within the capital.
Rob Wooden, economist at Pantheon Macroeconomics, mentioned the “further market repricing of rate cuts will put a cap on the housing recovery”.
He added that following the inflation information, markets anticipated fewer than two quarter-point rate of interest cuts by the top of 2024, in contrast with expectations of almost three cuts on the finish of March and 6 on the flip of the 12 months.
