The Deposit Protection Service (The DPS) has claimed that the UK rental market is in recession for the first time since the global financial crisis.
The latest figures from the DPS’s Rent Index show that during the second quarter of 2018 (Q2 2018), average monthly UK rent decreased for a second consecutive quarter for the first time since 2009, falling £7 or 0.97% from £771 to £764.
Average rent also fell year on year for the first time since the GFC, falling £10 or 1.30% from £774.
|Region||Average rent in Q2 2018||Change since Q1 2018||% change since Q1 2018|
Julian Foster, managing director at the DPS, said: “Following almost a year of low growth, the UK rental market is now in recession in almost every part of the country.
“On top of this, our prediction last quarter that rents would decline year-on-year in Q2 for the first time since 2009 have proven accurate.
“There are clearly long-term issues with the sector that are having a substantial effect on growth, particularly in the capital, and it’s difficult to see this negative trend ending any time soon.”
These two consecutive quarters in which average rent decreased followed three quarters of low rent growth; and average rent in Q2 2018 was cheaper than it has been since Q3 2016.
Outside of London, average rent during Q2 2018 was £671: £5 or 0.75% lower than a year earlier: £676 during Q2 2017.
Average rent was lower during Q2 2018 than Q2 2017 in every UK region except Northern Ireland, Scotland and the South West.
Meanwhile, Yorkshire experienced the greatest percentage decline in average rent between Q2 2017 and Q2 2018 by 2.95% or £17 from £567 to £550.
London experienced the greatest value decline in average rent between Q2 2017 and Q2 2018 by £36 or 2.73% from £1,326 to £1,289.
During Q2 2018, the North East was the cheapest UK region in which to rent property -£527 replacing Northern Ireland in Q1 2018.
Average UK rent also decreased as a proportion of average UK wage from 32.56% to 32.13% between Q2 2017 and Q2 2018.
Average rent decreased for every type of property between Q2 2017 and Q2 2018, with terraced properties experiencing the biggest decrease (£21.78 or 2.98%).