October rent figures show a 0.2% drop: are rents finally going down?

According to new figures, the average rent in the UK is now £1,059. This is a 0.2% drop from the previous month. What does this mean for renters?

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The HomeLet Rental Index shows rent figures for October 2021, and it reveals a slight drop of 0.2% from the previous month. What does this mean for renters? Will we continue to see rent going down month on month in Q4 2021?

[top_pitch]

What is the average rent in the UK in 2021?

Based on the HomeLet Rental Index, the average rent in the UK in October 2021 is £1,059 per month. Though this is up 8.7% the same time last year, it’s a 0.2% drop from September. However, excluding London, the average rent in the UK is £888, which is an 8.2% increase compared to the same time last year.

London alone saw an annual increase of 9.4% and a monthly increase of 0.4%, averaging £1,759. Here’s a table to clearly highlight how much rent you can expect to pay in different regions in the UK.

Region

Oct 19

Oct 20

Sep 21

Oct 21

Monthly variation (%)

Annual variation (%)

Variation on 2019 (pre-Covid)

Wales

£623

£657

£734

£742

1.1%

12.9%

19.1%

Northern Ireland

£672

£653

£705

£729

3.4%

11.6%

8.5%

Greater London

£1,665

£1,603

£1,752

£1,759

0.4%

9.7%

5.6%

North West

£727

£764

£830

£832

0.2%

8.9%

14.4%

West Midlands

£706

£733

£797

£792

-0.6%

8.0%

12.2%

North East

£538

£546

£578

£588

1.7%

7.7%

9.3%

Yorkshire & Humberside

£653

£675

£725

£727

0.3%

7.7%

11.3%

South West

£840

£892

£971

£960

-1.1%

7.6%

14.3%

South East

£1,020

£1,053

£1,139

£1,132

-0.6%

7.5%

11.0%

East Midlands

£642

£678

£735

£728

-1.0%

7.4%

13.4%

East Of England

£924

£961

£1,021

£1,027

0.6%

6.9%

11.1%

Scotland

£674

£693

£755

£738

-2.3%

6.5%

9.5%

UK

£953

£974

£1,061

£1,059

-0.2%

8.7%

11.1%

UK (excluding Greater London)

£953

£974

£1,061

£1,059

-0.2%

8.7%

11.1%

Only five regions registered a rent drop month on month, with Scotland registering the most significant drop. The data also indicates that the cheapest region to rent in is the North East, averaging £588, while the most expensive is Greater London, averaging £1,759.

[middle_pitch]

Will rent prices go down in the UK?

The supply of new lettings, especially after the impact of the Covid-19 pandemic, isn’t significant enough to meet increasing demand. This has led to an increase in rent prices, reflected in the table above.

Chris Turner, head of business development for Homelet and Let Alliance, comments, “In normal market conditions, we might see spikes in rental values for desirable or emerging areas, but we’re still seeing a really high demand for all property in the lettings market; that’s now the case in most parts of the UK.

“With fewer new properties coming up to rent when compared to pre-pandemic levels, we can expect the trends we see continuing throughout 2022.”

Why is there less government support for the private rented sector?

There’s no doubt that the private rented sector provides homes for many Brits. But it’s a sector that seems to be largely overlooked by the government when it comes to financial support. 

Most of the government’s effort is directed to turning ‘Generation Rent’ into ‘Generation Buy’, which is why there are so many incentives for first-time homebuyers, including ways to save money on a mortgage. After all, it makes sense due to the many benefits homeownership presents.

The two most common advantages are that you get to hold onto an asset (your home), which could increase in value over time. Also obtaining and maintaining a mortgage is thought to help you build financial understanding that will serve you for the rest of your life.

This has led to many renters in the private rented sector struggling to pay rent with minimal assistance. However, if you’re currently facing challenges paying your rent, you could check whether you’re eligible for the new £65 million support package for vulnerable renters this winter.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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