Soaring rents that have plagued London tenants for years finally appear to be in decline.
The average monthly cost of a rental fell 4.7% in the year to February from £1,309 to £1,246 (US$1,518), according to a report out Sunday from real estate consultancy Countrywide.
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Much of the decrease was attributed to an imbalance between supply and demand, with a double-digit annual rise in the number of homes available to rent, while the number of potential tenants looking for a home dipped 3% over the same period.
Countrywide said the increased level of stock is likely to continue to bear down on rental growth in the coming months, although it cautioned that London rents are still historically very high.
"Recent falls in London and the South East are small in the context of growth in recent years. Rents are a third higher in London and the South East than in 2007," said Johnny Morris, research director at Countrywide, in the report.
Across the U.K., rents fell 0.6% in the year to February to £921 (US$1,122) a month, £5 down compared to February 2016. Although this was the first annual drop since November 2010, rents are still £112, or 14%, a month more than their previous peak in 2007.
The slowdown in average rental growth is driven by a fall in the number of tenants looking for a home, combined with higher numbers of homes available to rent in London and the South East, according to Countrywide. Outside of London and the South East, rents rose 0.8% year-on-year.
"Rents are growing in most of the country but falls in London and the South East are dragging down the national growth rate," Mr. Morris added.
As for predictions, a lot depends on where in the country you’re looking.
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"Early signs point towards 2017 being a rare year where rents rise faster in the north of the country than in the south," Mr. Morris said. "While rents are likely to track any increase in earnings, affordability in London and the South East remains stretched. That is likely to limit rental growth."