Market dip as rental growth slows in almost every region

The pace of rental growth cooled in May, with the average rent on a newly let home in Britain rising 9.1 per cent year-on-year.

According to lettings agency Hamptons this is down from 11.1 per cent in April.

Every region, apart from the South West, saw rental growth slow. 

London, where rents have been rising fastest, recorded the biggest deceleration.  The average cost of a newly let property in the capital rose 13.3 per cent year-on-year in May, down from a record 17.2 per cent in April.  

Inner London continued to post the strongest growth.

Scotland was the only other region to record double-digit rental growth last month.  Here, rent hikes are capped on existing tenancies, but rents on the open-market where a new tenant moves in are still rising quickly, up 11.6 per cent year-on-year.

Hamptons head of research Aneisha Beveridge says: “The good news for tenants is that rental growth is starting to cool, and we expect that to continue throughout the remainder of the year.  

“Average rents across Britain have risen 47 per cent over the last decade, underperforming house price growth of 69 per cent over the same period. 

“However, the key issue, is that over half of that rental growth has occurred within the last four years.  And this has come at a time when household incomes are under pressure from other rising costs.  

“That said, many landlords are also facing similar pressures, and this is one of the key factors underpinning rental growth this year.”