New rents outside the capital have risen faster than in London for the first time since 2010.
Countrywide’s November Monthly Lettings Index shows rents in Greater London fell 0.7% year-on-year to £1,284.
This is the sharpest fall since October 2010 and now means that over the course of the past 12 months, London has gone from the region with the second fastest rate of rental growth in Great Britain to the slowest.
Across the country the cost of a new let rose by 2.0% over the past 12 months to £925.
|Region||Ave Rent Nov-16||Ave Rent Oct-16||Ave Rent Nov-15||November Rent YOY|
|Greater London (excl central London)||£1,284||£1,302||£1,292||(0.7%)|
|East of England||£981||£996||£941||4.3%|
The gap between rents in London and the rest of Great Britain has steadily grown over the past five years. By 2015, the gap had reached a record £490 a month, up from £150 a month in 2010, Countrywide says.
But with rental growth slowing in the capital, the gap between London and the rest of the country has narrowed. By November 2016 the gap had fallen to £489 a month, the first fall since 2010.
Gap between London rents and the rest of GB
|Greater London||GB (ex London)||Difference (£)||Difference (%)|
Countrywide attributes the narrowing gap between London rents and those in the rest of the country to a surge in the number of homes available to rent in the capital. In November there were 32% more homes to rent in London than 12 months ago, while the number of would-be tenants rose by just 9%.
Johnny Morris, research director at Countrywide, said: “Higher than usual numbers of homes available to rent has boosted tenants’ negotiating power. Stock growth has outstripped that of tenants.
“This is in part due to the hangover from the rush to beat the 3% stamp duty charge earlier in the year and a shift in stock from the sales market. With more choice and facing stretched affordability, many tenants are using their new-found negotiating power to agree lower rents than in 2015.
“Since the gap between London rents and those in the rest of the country hit a high water mark in 2015, the gap has been gradually narrowing.
“The pressure on affordability and number of homes coming on to the rental market in the capital means that rents are likely to lag behind the rest of the country in 2017.”