For landlords, the rental market has continued to improve time and again across the course of the last few months, but tenants are now also seeing better news, with the latest data showing that even though the cost of renting is still headed higher, it is doing so at a far slower rate than it has done previously.
According to the newly released HomeLet rental index for the end of June, the average new tenancy price in the UK, excluding London, now sits at some £773 per month. The index shows that this marked a rise of 3.5 per cent in June this year when compared to the same period in 2015.
And in London, prices now stand at an average of £1,575 per calendar month on new tenancies, which represents growth when compared to June last year of some 3.9 per cent. In total, 10 of the 12 UK regions have seen prices for rental homes increase in the year to the end of June, according to HomeLet.
However, while these are both showing substantial health in the rental sector, the data suggests that prices are slowing down, which has been a general trend in the rental market for 2016 to date. In May, for example, prices excluding London had climbed by 4.4 per cent year-on-year, and capital prices were up by 6.2 per cent. This means that in the space of just one month, the yearly growth rate has slowed rather quickly.
Martin Totty, chief executive of Barbon Insurance Group, HomeLet’s parent company, said: "Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth. The impact of the EU referendum vote will now play out over the months ahead.
"If, as expected, the result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked, all the more so if more people decide to rent while waiting to see what happens to house prices," he added.