What is the current state of the rental market in the UK? Zoopla looks at the latest reports, which show it’s something of a mixed bag for tenants and landlords.

What’s the latest?

Rents across the nation fell by 0.3% in June, compared to the same month a year ago, according to new data from tenant referencing service HomeLet.

It's the second month in a row in which rental prices have dropped, and puts the average monthly rent paid in the UK at £908, edging down from £910 in June 2016.

In London, rents have fallen on an annual basis for three consecutive months. Tenants in the capital now pay an average £1,524 a month, down from £1,564 a year ago.

June’s decline mirrors the 0.3% decrease seen in May which, as previously reported on Zoopla, was the first annual fall in rents recorded since December 2009.On the ground floor of this Kew Bridge development in Brentford, London, is this two-bedroom flat, available to rent for £2,600 a month

Why is this happening?

HomeLet points primarily to the 'current uncertain economic climate' to explain the emerging pattern of falling rents.

Its report said: “While demand for private rental property remains high relative to supply, landlords continue to be conscious of affordability issues for tenants and are reluctant to charge higher rents.”

Tables are turning in tenants' favour in other ways too.

For example, the Government recently announced a complete ban on fees charged to renters by letting agents, which is set to take effect from 2018.

A proposed tenant deposit cap of four weeks' rent was also mentioned in the Queen's speech last month.In Cardiff, this furnished, two-bedroom flat with views of the city centre is available to rent, for £1,200 a month

Who does it affect?

What happens in the capital tends to 'act as a driver' of rental movements elsewhere, according to HomeLet. 

And, as London showed a 2.6% decline in the average rent agreed on a new tenancies last month, many renters around the country will be in line for better deals.

In fact, HomeLet reported that rents fell in five out of 12 regions in June.

These include the East of England (-0.1% year-on-year), southeast (-0.2%), Yorkshire and Humberside (-0.9%), Greater London (-2.6%) and the northeast (-3.1%).

Across the UK however, it was still a mixed bag. Northern Ireland for example saw monthly rents increase to £610, up 3.5% from £589 in June 2016.

Monthly rents in the East Midlands also increased to an average £614, up 2.8% from last year's £597, while in Wales they climbed by 2.5% to a current £608.

Scroll down to the table for a regional breakdown in rental movements.For £1,250 a month you can rent this fully furnished studio apartment in Deptford, London

Sounds interesting. Tell me more.

While HomeLet's data has shed light on falling rents, analysis by other organisations, also published this week, reveals tenants are still lumbered with affordability issues – especially in the capital.

And some private renters are forking out up to 50% of their entire monthly pay for somewhere to live.

Rental affordability

Property analysts at Hometrack, part of the Zoopla family, say that rental housing in London is at its least affordable level in a decade.  

Hometrack attributes this to increased demand due to strong employment growth, inward migration as well as mortgage constraints on would-be first-time buyers.

However, it predicts that rents in London will fall by between 1 and 2% during 2017. Spokeperson Richard Donnell said: “Ultimately, rental levels need to reflect affordability and the buying power of tenants.”

A separate report, from the Local Government Association (LGA), found that one-in-seven private renters (14%) are spending more than half of their total income on rent. Also, 43% are spending more than 30% of their income.

The LGA warned that a shortage of affordable housing is leaving a generation stuck in a ‘rental logjam’ and is lobbying politicians to pave the way for the building of a, "new wave of rented homes that families can actually afford, [costing] no more than a third of household incomes".

HomeLet's figures, below, show the average amount paid by tenants, across the regions:

Region

Jun-17

May-17

Jun-16

Monthly Variance

Annual Variance

Northern Ireland

£610

£609

£589

0.3%

3.5%

East Midlands

£614

£614

£597

-0.1%

2.8%

Wales

£608

£605

£592

0.4%

2.5%

North West

£688

£679

£674

1.4%

2.0%

Scotland

£636

£622

£624

2.3%

1.9%

South West

£800

£803

£797

-0.4%

0.4%

West Midlands

£662

£658

£661

0.7%

0.2%

East of England

£906

£909

£907

-0.4%

-0.1%

South East

£1,015

£998

£1,017

1.7%

-0.2%

Yorkshire & Humberside

£615

£614

£621

0.2%

-0.9%

Greater London

£1,524

£1,502

£1,564

1.5%

-2.6%

North East

£525

£522

£541

0.6%

-3.1%

UK including Greater London

£908

£901

£910

0.7%

-0.3%

UK excluding Greater London

£757

£753

£753

0.5%

0.5%

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