UK rental market set for seasonal dip

[Nicholas Wallwork]

Average advertised residential rental prices in Britain dropped to £972 last month but some parts of the country are still seeing robust growth. The last quarter of the year is traditionally a period of cyclical decline for average advertised rents, with prices usually falling by around 5%, says the latest index report from Move with [...]

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[TurnKey Landlords]

It's no surprise to see London having had a fairly static year; if it were to grow at the rate shown in the North East, say, an overwhelming number of renters would be priced out (especially considering the tendency in London to take larger security deposits and up-front rental payments). The lofty capital growth of London properties puts a floor under rents, but the relative differential needs to be kept lower as a result - London yields tend to be lower than the national average.

The seasonal dip is to be expected - a flurry of (usually HMO) activity in September with the start of the academic year is followed by a stagnation as new build slows and people stay put for the winter months.

A number of lenders are actually offering incentives to apply for BTL mortgages this winter in order to combat the lull. It could be that, as a result, the upswing we see after the seasonal dip will be all the larger.