The UK rental market remained in recession during the third quarter of 2018 (Q3 2018) according to the most recent figures from The Deposit Protection Service (The DPS).
In the latest edition of its Rent Index, which is based on the organisation’s database of millions of properties across the UK, The DPS reports that average rents decreased for the third consecutive quarter in Q3 2018, falling from £764 to £761. The Index also shows that average UK rent has now decreased £14 or 1.83% since Q3 2017 and is now lower than the national average for 2016.
Julian Foster, Managing Director at The DPS, said “A third consecutive quarter of declining UK rents signals that there will be no immediate bounce back from the recession that hit the market last quarter. This negative period forms part of a slowdown that began in the summer of 2016, which we believe is linked to broader economic factors that are affecting spending power and demand.”
“Another quarter of lower rents in Q4 2018 would mean the first full year of negative growth since the Global Financial Crisis in 2008 and 2009: a significant threshold for the market.”
The East Midlands was the region that experienced the greatest decrease (£14 or 2.47% from £583 to £569) during Q3 2018. Northern Ireland experienced the greatest increase (£15 or 2.68% from £542 to £557), which also represented the region’s second consecutive quarter of growth.
Across the UK average rents fell on all property types during Q3 2018 except detached houses, for which rent increased by £8 or 0.84% from £975 to £983. Terraced properties experienced the largest decrease in rent (£5 or 0.72% from £709 to £704).
Average rents in the North East remain the lowest in the UK (£529). Although average rents across the UK are now below 2016 levels, this is driven by the decline in rents on flats and terraced properties.
Semi-detached and detached properties still remain above 2016 averages, albeit only just, and a further decline of just 0.11% in Q4 2018 would see average rents on semi-detached properties fall back to 2016 averages.