Rents in England are increasing at their slowest pace in five years, according to a report mortgage lender Landbay published on Thursday.
Rental growth countrywide slowed to an annual rate of only 1.18% in May, the slowest recorded in Landbay’s monthly index since April 2013, the lender said. Economic uncertainty and a sluggish housing market have pumped the brakes on price growth since the 2015 peak, when prices were growing at an annual rate of 2.63%.
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Across England, tenants paid an average £1,234 (US$1,654) in rent in May.
Meanwhile, London rents have been falling for nearly a year and a half, though the city is past the worst rental declines, according to the report. In May, rents fell by an annual rate of only 0.8% to an average rent of £1,881 (US$2,522), according to Landbay Rental Index, which uses data from analytical firm Mortgage Industry Advisory Corporation.
Rents are still stretching household budgets despite the market slowdown, said John Goodall, co-founder and chief executive of Landbay.
"The cost of renting a property remains a huge burden," Mr. Goodall said in the report. "Rising house prices, falling wages and high inflation continues to dampen the ability of aspiring homeowners to save for a property of their own, meaning demand for rented accommodation remains robust."
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Over the past five years, rents have grown more than 10% across England as well as in the United Kingdom. Regionally, East England saw the greatest hike in rents, with prices rising 14.67% in the past five years.
A general housing shortage in the U.K. has kept the supply of buy-to-let properties "severely out of kilter with the demand," Mr. Goodall said. "Until this is resolved, prices will continue to increase."