London rents fall but millennial tenants still under pressure
The data also showed that for new London tenancies rents fell by 1.2% in April when compared to the same month last year. This was the first fall since December 2009.
In Greater London, average April rents fell to £1,519. This was down from £1,546 (-1.2%) in April 2016. Across the South East, rents also fell back in April, dropping by 0.4% from £1,007 in April 2016 to £1,003 last month.
According to Homelet, the slowdown in the capital, along with falls in the wider South East region, pushed rental price inflation down across the country.
Commenting on the research, Homelet chief executive officer Martin Totty said: “Rents have been rising at a much more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents seen in areas of the country where prices were previously rising most quickly. This trend is ongoing: we continue to see landlords and letting agents weighing tenant affordability considerations very seriously.”
The news was not so bad for landlords in other areas of the country and year-on-year April rents were up in Wales (2.3%), the North East (2.2%), Scotland (2.2%) and Northern Ireland (2%).
Growing rent expense
The figures come at a time when there is increasing concern for the proportion of take home pay that millennials need to meet their rent.
According to the latest Landbay Rental Index, tenants aged between 18 and 39 and living alone spend 69% of a monthly post-tax income on rent. In a shared house of two people, overall rent adds up to 39% of each tenant’s income, while those co-habiting in a three-bed property would each spend 30% of their monthly take home pay on rent.
Landbay accepted that rents in some areas of London were falling, but claimed that outer boroughs popular with millennials, such as Barking and Dagenham, Havering and Bexley had seen rents grow significantly.