Average rents on newly let properties across Britain rose 8.3 per cent year-on-year in January, the slowest pace for 13 months and the first time in six months that growth has been in single digits.
The data comes from lettings agency Hamptons which says last month 59 per cent of landlords achieved a higher rent when a new tenant moved in, down from a peak of 81 per cent in January 2022 and 79 per cent in January 2023.
And there are 34 per cent more rental homes on the market today than at the same time last year, but 43 per cent fewer compared to the same time in 2019. Hamptons says that while rental growth is slowing from record levels, it is set to remain sticky, running ahead of inflation for the remainder of 2024.
While eight of the 11 regions in Britain saw the pace of rental growth slow between August 2023 and January 2024, the slowdown was primarily driven by London.
Annual rental growth in the capital more than halved between August and January, falling from 17.1 to 8.1 per cent, meaning it recorded the slowest rental growth in two years.
Consequently, fewer landlords are securing a higher rent when re-letting their property.
The bulk of the rent increases during 2022 and 2023 were driven by landlords of smaller homes. This was a reflection of higher demand for cheaper properties in the face of a cost-of-living squeeze.
Last year, 83 per cent of one-bed homes were re-let at a higher price, compared to 67 per cent of four-bed homes. In early 2024, the gap between these figures has for the most part now closed with similar increases seen across all property sizes.
However, the share of landlords able to achieve higher rents remains firmly above the pre-pandemic average.
The agency says this suggests that the upward pressure on rents has not completely dissipated. During the five years between 2015 and 2019, an average of just under half of landlords were able to secure a higher rent when re-letting their property, with rental growth running alongside or even below the rate of inflation.
Aneisha Beveridge, head of research at Hamptons, says: “Last summer looks like it may have been the high watermark for rental growth. Since then, fewer landlords have been putting up the rent. Where they have, in cash terms, monthly increases have tended to be in double rather than triple figures.
“The scale of mortgage rate rises kickstarted two years of record-breaking rental growth. As landlords have rolled off fixed terms, they’ve been partly feeding these higher costs through to tenants in the form of higher rents. But just over two years on from the first Bank of England rate hike, higher rents coupled with higher prices more generally have placed an increasingly tight straitjacket around tenant’s finances, curtailing their ability to pay more.
“While the upward pressure on rents seems set to weaken in 2024, particularly since mortgage rates have come down, wider pressures on landlords mean rental growth will remain stubbornly sticky. Reduced returns coupled with the additional time and financial costs stemming from rental reform have squeezed the numbers of new landlords. This looks set to keep rental growth running ahead of inflation this year.”
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Every new let this year has seen an increase in rent. 👍Not one has been advertised at the existing rent. 🤔
Rental income passed it peak years ago when the Council’s muscled in taking the money from it, driving up Rents making Rents unaffordable, creating a Shortage forcing out Landlords the root cause of Homelessness. So now they want us to learn from them ?, go and learn how to do your own job first.
I would fire the head of research at Hamptons as clearly she is researching her own bubble.
Just let one for double the previous rent and had the agent asking if I have anymore ready to go, six people all ready to pay over and above to secure a property. She needs to give her head a shake 🫨…
Nonsense, I have been hearing this for years 😂 they can’t go up anymore …. Then the government steps in and up they go 💰
I'm having a round of rent increases at present, not one tenant has given notice although there is one that I wish would
Agree, all mine going up 10% again this year due to 100% increase in mortgage interest
Rents for my existing tenants have gone up every year & will continue to do so because even with regular rises they are still well below MV. New lets? Well they're being sold off not relet when they become vacant!
Sounds like Hamptons are trying to condition the view of landlords with the old "prices topped out, lets look at some offers" ruse, normally a safe ground for Chestertons. Classic agent jedi mind trick to get some deals done. A difficult one to pull off though when all the data (outside Hamptons) suggests the opposite is happening.
I wouldn't pay any regard to the likes of Hamptons, I would never deal with those sort of compainies
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