BY: William Schomberg
LONDON: Rents for residential properties in Britain fell in quarterly terms for the first time since 2012 in the January-March period of this year, intensifying a slowdown which began shortly after the 2016 Brexit vote, a report showed on Thursday.
Average rents were 0.5 percent lower than in the last three months of 2017, according to the Deposit Protection Service which runs a deposit protection scheme for landlords and tenants.
“Although the first quarter of this year saw the first negative rent growth in some time, the current slowdown began in mid-2016 and could well be linked to the EU referendum result,” Julian Foster, DPS managing director, said.
“General economic uncertainty is undoubtedly an influence and seems to have hit demand for rented property in particular as fewer people choose to move – and fewer landlords seek to increase rent.”
A similar fall in the second quarter would represent the first decrease in rents in annual terms since 2009, DPS said.
Rents in London fell by 1.4 percent in the first quarter and the biggest fall was registered in Northern Ireland where rents were down 3.1 percent.
A measure of private rents compiled by the Office for National Statistics, Britain’s official statistics agency, has shown growth in private rents in the 12 months to March stood at 1.1 percent, less than half the rate before the Brexit vote.
Another report published on Thursday showed two thirds of companies surveyed in London felt high housing costs and a poor availability of accommodation were making it harder to recruit junior staff.
“The potent combination of lack of supply and high prices means businesses themselves are being priced out of the market, as they can’t afford to recruit and retain their workers,” Eddie Curzon, London director of the Confederation of British Industry, which commissioned the survey, said.
A third report on Thursday showed falling demand for retail properties in Britain as rising online sales changed traditional shopping habits. By contrast, demand for industrial space rose, reflecting the need for logistics centres for e-commerce, the report by the Royal Institution of Chartered Surveyors showed.
Source: Reuters (Editing by David Milliken)