Rents continued to rise across the country in recent weeks, buoyed by double-digit hikes in the North of England.
Lettings agency Hamptons says that across Britain the average rent on a newly let property rose to £1,354 pcm last month, 5.7% or £72 pcm more than in July 2023.
This marks the twelfth consecutive month where the annual pace of growth hasn’t risen. However, outside London, rents rose 7.2% year-on-year, driven by a 10.3% annual increase in the North of England where rents have been accelerating since March.
This means that rents in the North (North East, North West and Yorkshire & Humber) are rising three times faster than in London, where the average rent on a new tenancy increased 3.0% year-on-year, down from the 13.9% increase recorded in the capital in July 2023.
This comes despite average rents in Inner London returning to growth following three consecutive months of annual decline. For the first time since January, Inner London rents rose faster than in Outer London.
While the pace of rental growth has slowed for larger homes, rents for smaller properties are accelerating as tenants downsize to keep their monthly payments within their means.
The average one-bed home rose to £1,092 pcm in July, up 7.6% compared to the same time last year. Meanwhile, the average three-bed rent increased 5.2% and the average four-bed rose 3.8%. The average one-bed property now costs the same amount as the average two-bed did back in September 2022.
Aneisha Beveridge, Head of Research at Hamptons, says: “Rental growth continues to outpace inflation, despite the pace of growth moderating over the last year.
“However, there are also signs that the large increases in stock levels since 2023 are beginning to subside.
“In January, stock levels were up 34% year-on-year, a figure which is now 22%. A fall in stock levels is likely to reignite the pace of rental growth, particularly given that longer-term there are around a third fewer rental homes than there were five years ago.”
