HomeLet’s latest UK rental market data shows regions outside of London experiencing the sharpest rent increases.
While Greater London remains the most expensive region, with an average rent of £2,148 in August 2024, the annual growth rate there has slowed to just 0.1%.
In contrast, regions such as the East of England and the North East have seen rents soar, growing by 9.4% and 9.2% year-on-year, respectively.
Chief executive Andy Halstead says: “The rental market continues to be challenging for all stakeholders. The next 6 months or so will be interesting, and I am not optimistic. Tenant affordability will be the challenge for 2025; every indictor suggests, and, to quote our new Prime Minister, “things will get worse before they get better.
“Increases in taxation, the removal of winter fuel payments, rising fuel duties, essential services, and the overall cost of living are all putting tenants under growing financial strain. With limited housing supply driving rents higher, it’s more crucial than ever for agents and landlords to safeguard their revenue streams.”
East of England leads the charge – The East of England saw the highest annual growth, with rental prices jumping by 9.4% compared to August 2023. The average rent in the region now stands at £1,302, up from £1,190 last year, with a 1.4% increase from July 2024 alone. This growth suggests a shift in demand away from the capital, as more renters seek housing in areas with strong transport links and burgeoning job markets.
North East rising fast – The North East, traditionally one of the UK’s most affordable regions, is experiencing a sharp rise in rental prices, with an annual increase of 9.2%. Rents in the region have climbed to £715 in August 2024, up from £655 in August 2023, with a 1.9% month-on-month increase. This marks a significant shift, as the North East becomes a focal point for renters looking for more affordable yet increasingly competitive housing options.
Northern Ireland defies the trend – Northern Ireland recorded a slight drop in rental prices, with a 0.3% decrease month-on-month. However, on an annual basis, rents in Northern Ireland have still risen by 6.8%, reflecting ongoing demand in the region, despite the monthly dip. The current average rent stands at £898.
Steady growth in Wales, Midlands, and Scotland – Wales and the South East saw similar year-on-year growth rates, both rising by 7.5% annually. The West Midlands and North West regions also reported strong annual growth of 8.3% and 8.1%, respectively, while Scotland saw more modest increases of 3.4%.
Contrast in the South West and Greater London – While the South West saw one of the largest monthly rent increases at 2.4%, reaching £1,215 in August 2024, Greater London has experienced a more modest recovery. The capital saw a 2.2% monthly increase, bringing rents to £2,148, but with just 0.1% annual growth. This suggests that while London remains expensive, the upward pressure on rents is easing compared to other regions.
Household income to rental ratio – The rising rental prices are increasingly outpacing income growth, putting further strain on household budgets. The Household Income to Rental Ratio — the share of income households spends on rent — has risen significantly in the past decade.
