New figures from the Hamptons lettings agency show that rental growth is softening – although the overall rate remains high.

The agency says the average price of a newly let home has risen 6.9 per cent in the past year and now stands at £1,186 per calendar month.

London leads the way with rents up 11.3 per cernt year-on-year across the capital and 26.1 per cent in Inner London.

In Scotland, where a rent cap for existing tenants was introduced last month, the price of a newly let Scottish home – which is exempt from the controversial price cap – rose 8.9 per cent over the past 12 months. Across Scotland there were 60 per cent fewer homes available to rent than in September 2019 – before the pandemic – and this is a larger fall than anywhere else in the country over the same time period.

Across Great Britain as a whole September saw the first annual increase in the number of homes available to rent in five years.  

There were 14 per cent more homes available to rent than in September 2021, and stock levels are up slightly on last year.

Aneisha Beveridge, head of research at Hamptons, says: “While rapidly rising rents have softened the impact of higher interest rates for landlords, rental growth only offsets around a fifth of their increase in mortgage costs.  

“This means that a landlord who bought an average home two years ago with a typical 25 per vent deposit would need to increase their equity from 25 to 55 per cent if they re-mortgaged today in order to maintain the same monthly returns compared to when they first bought.  For the average investor, this means stumping up an extra £67,000 in cash.”