Rents dip slightly in almost every UK region

The latest HomeLet rental index begins 2024 with a glimmer of hope for tenants as rents have fallen for the second successive month, down 0.9 per cent. 

In all regions of the UK - with the exception of the East Midlands which saw a 0.3 per cent increase - monthly rental prices have fallen, many of which for the second consecutive month. In the capital, a 2.2 per cent decline was noted. 

But HomeLet says the wider context is one of rental prices soaring by 8.01 per cent in the last year alone and as much as 19.6 per cent since 2021 – the equivalent of more than £200 extra per month for the average tenant. 

In regions such as Scotland and Greater London, these figures are 23.4 and 21.4 per cent respectively. 

HomeLet calculates that tenants are forking out just 33.4 per cent of their monthly wages on rental costs, a two per cent increase since last year. In Northern Ireland, concern is growing as this figure has increased by 10.7 per cent in a year, rising to 38.1 per cent of monthly wages. 

Andy Halstead, HomeLet & Let Alliance chief executive, says: “January is a good time for us to reflect on the previous year with our HomeLet Rental Index and make predictions as to what is to come in 2024. The New Year starts with restrained optimism, as our records show a minor decrease in monthly costs for the second month in a row.

“In fact, rental prices have fallen in all regions across the UK with the exception of the East Midlands. Even in the capital, where tenants now pay an average of £2,127 pcm, rents have dropped by almost £50 per month since our November data was released.

“… Unless we see some dramatic changes, 2024 looks set to bring more of the same. Landlords will have to do battle with a familiar array of struggles, including a lack of stock, rising costs and prohibitively expensive buy-to-let mortgage rates.

“For those reasons, combined with lingering high inflation and the country’s financial crises, it’s unlikely we’ll ever see rental prices drop to the rates they were at when we were exiting the Covid-19 pandemic. The impact of that, alongside questionable budget decisions and overall weak management of British finances, means that we estimate by this time in 2025, rent increases of between five and 10 per cent won’t be surprising.

“Nevertheless, to see a small decrease in rental prices across the country this month has been a pleasant surprise. For the sake of the UK’s renters, we hope that this trend continues into 2024. Similarly, we hope that mortgage rates will continue to fall and that landlords who are entering the market or are looking to renew their mortgage agreements can benefit from more affordable rates should the predicted interest rate cuts happen. We shall wait and see.”

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