Camden rents fall 8 per cent in June

Rents in London have fallen nearly 8 per cent in comparison to June 2016, but are still 101.3 per ce

Rents in London have fallen nearly 8 per cent in comparison to June 2016, but are still 101.3 per cent higher than in the rest of the UK - Credit: Archant

Annual rents have fallen for the third month running with average rents now £1,905 in Camden and the City of London, but prices are still 101 per cent higher in the capital than in the rest of the UK

Rents in Camden fell almost 8 per cent in June for the third month in a row. In both Camden and the City of London the average rent is now £1,905, an annual decline of 7.8 per cent.

The figure puts the two boroughs in tied second place behind Westminster, with the highest average rent of £2,041.

Rents have declined further than in May, when rents in the two boroughs fell 6.9 per cent on an annual basis.

Figures from HomeLet show that rents across London fell 2.6 per cent in June compared to last year. Average rents agreed on a new tenancy in the city now cost £1,524, down from the £1,564 charged in June last year but up 1.5 per cent from the £1,502 charged in May. In neighbouring boroughs Haringey and Islington, the average rent in June was down -11.2 per cent to £1,467, the greatest annual variance across all boroughs. In May, rents in the borough fell 6.5 per cent to £1,452.

Rents in Greater London were still 101.3 per cent higher in June than in the rest of the UK. In the capital, the household rent to income ratio is now31.1 per cent, compared to 33.5 per cent last June, a variance of -2.4 per cent.

In the UK excluding London, the household rent to income ratio was 27.9 per cent last month, a fall of 0.8 per cent since June 2016. The average rent in June was £757, up 0.5 per cent from £753 in May, an annual variance of 0.5 per cent. Falling rents echoed May’s decline of 0.3 per cent, with national average rents of £908, suggesting a greater level of stability. Falling rents in May were the first nationwide decline on an annual basis since 2009.

Commenting on the research Martin Totty, CEO of HomeLet said: “It is now a full year since rental price inflation in the UK peaked at 4.7 per cent, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country; June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty.”

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The prosperity of the buy to let market will in no small measure depend on the economic performance of the country in the next two years whilst Brexit is being negotiated. The Centre for Economics and Business Research (CEBR) has recently revised down the growth forecast for 2017 to 1.3 per cent, with 2018 estimated to show growth of just 1.2 per cent. Both estimates show a fall of 0.4 per cent on the original predictions, and should they occur will match the growth achieved during the financial crisis in 2009. That said, the CEBR has revised up its forecast for a post-Brexit Britain.

The news will come as good news for tenants; having peaked at 7.1 per cent in June 2016, rental price inflation has slumped considerably. Annual variance has been in decline in the country for the last year, now seeming to settle at -0.3 per cent.

However, renters hoping to book Bahamas break should not throw caution to the wind just yet since the average national £2 saving on last year’s rents won’t buy so much as a solitary pint. However, with London’s renters saving £40, a shaky economic climate might just make the 1st of the month a little easier on the purse strings since landlords are loath to put rents up for fear of losing valuable tenants and losing out on their buy-to-let investments.