Private sector rental inflation was just 4 per cent in the year up to September 2003, according to the first official figures published for the sector.
Although rents have risen overall by 22 per cent in the last three years, there is concern that weakening of the rental market could hit property prices as the buy-to-let sector has buoyed the housing market.
Figures from the Office of the Deputy Prime Minister show that rents rose by an average of 1 per cent a quarter. Until now, there has been no official published index of private rental sector rents. The ODPM's survey, published last week, is described as “experimental” and will be available quarterly.
Savills Private Finance Mark Harris says: “Rentals have fallen in certain parts of the country, not everywhere. This will not pose a huge threat but it has refocused some clients in London to focus their portfolios on other locations.”