Rent price growth slows

Julian Foster, Managing Director at The DPS

A new economic index created by academics and based on a database of millions of properties has shown that average rent in the North West increased £13.42 or 2.29% over the last year, The Deposit Protection Service (The DPS) has said.

The DPS Rent Index – published for the first time today – is based on the UK’s largest deposit protection provider’s database of rent levels across the UK over the last ten years, and its figures show that between the third quarters of 2016 and 2017, average rent in the North West increased to £598.92: its slowest rate of increase since 2013.

Rent Index £ change % change

• 2007 Q3 £500.18 85.56 
• 2008 Q3 £511.83 87.55 £11.64 2.33%
• 2009 Q3 £503.58 86.14 -£8.25 -1.61%
• 2010 Q3 £520.03 88.95 £16.44 3.27%
• 2011 Q3 £526.95 90.14 £6.92 1.33%
• 2012 Q3 £533.97 91.34 £7.02 1.33%
• 2013 Q3 £543.18 92.91 £9.21 1.72%
• 2014 Q3 £555.80 95.07 £12.62 2.32%
• 2015 Q3 £566.88 96.97 £11.08 1.99%
• 2016 Q3 £585.50 100.15 £18.62 3.29%
• 2017 Q3 £598.92 102.45 £13.42 2.29%

Nationally, average UK rent increased by £11.55 or 1.51% between the third quarters of 2016 and 2017.

Julian Foster, Managing Director at The DPS, said: “Figures suggest that the rental market has slowed in the North West since the third quarter of 2016, and letting agents, landlords and tenants will be keen to see whether this trend continues over the next year.

“This post-Brexit vote increase is the smallest witnessed since 2009 and comes after three years of particularly high growth, suggesting the influence of other macroeconomic factors such as housing, employment and inflation.

“While we are still some distance from seeing the roughly 3% national fall that came with the last Financial Crisis, the change over the last year identified by the Index represents a significant shift for the market.”

The Index was developed by Professor of Global Economy, Joe Nellis, who was jointly responsible for the research and development of the UK's leading house price measurement systems, the Halifax and the Nationwide House Price Indexes, and Catarina Figueira, Professor of Applied Economics and Policy, both of Cranfield School of Management.

Mr Nellis said: “The DPS Rent Index should be viewed as an important indicator in understanding trends within the UK economy, and is particularly useful in analysing the property, housing and private rented sectors.

“Based on a unique, massive and hitherto untapped pool of data and applying a thorough academic methodology, the index should be regarded as an invaluable source of information on rent prices and trends across the UK.”

According to The DPS over the last decade, average rent in the North West has increased by £98.73 (19.74%).

Average rent in the region is the seventh highest in the UK. Average rent in the region is £176.21 (22.73%) less than the UK average.

Rent in the North West represents 27.08% of median salary after increasing marginally as a proportion of average wage for the fourth consecutive year (by 0.08%).