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Rents follow house prices in UK with first fall in seven years

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Staff Writer | June 7, 2017
Rental prices are in decline for the first time in seven years, a decrease not seen since the depths of the financial crisis, according to figures compiled by the landlord insurance provider HomeLet.
UK house
Britain   The first fall in house prices for three successive months
The figures follow the first fall in house prices for three successive months since the financial crash and add to the sense that the housing market is cooling.

"The average monthly rent on a new tenancy that started in May was £901, which was down 0.3 percent on the May 2016 figure of £904," says The Guardian. It's the first time the annual growth rate has fallen since December 2009.

In London, where both house prices and rental prices are well above the national average, rents have plunged by three percent over the past year, from £1,572 to £1,502.

"Analysts point to a number of factors slowing rental growth," says the Daily Telegraph, including low wage growth, job security concerns and increasing mortgage provision for first-time buyers with small deposits.

These factors have a negative effect on tenant demand.

In short, there are a large number of first-time buyers. Those currently renting cannot afford to pay ever-higher monthly rates.