The low supply of rental homes continues to put upward pressure on rents, reports Hamptons.
The average tenant paid £1,347 pcm to rent a new home in Britain last month, 5.8% or £74 pcm more than if they moved last year. This means rents are rising nearly three times faster than inflation, which was 2.0% in June.
Tenants moving into a new home in Scotland faced the biggest increases. Here, rents on newly let properties rose 11.1% year-on-year, marking the 39th consecutive month when rental growth exceeded 5%.
However, London is slowing the pace of rental growth across Britain.
Average rents on newly let properties in London increased 2.7% year-on-year, the weakest annual growth rate recorded since October 2021). This figure was pulled down by Inner London where rents fell for the 3rd consecutive month following 14.8% annual growth in June last year.
Meanwhile, rents in the North of England are still rising at double-digit pace.
| Average Rent pcm | YoY % | YoY £ |
Greater London | £2,331 | 2.7% | £60 |
Inner London | £3,065 | -0.2% | -£7 |
Outer London | £2,192 | 3.5% | £73 |
East of England | £1,281 | 7.0% | £84 |
South East | £1,425 | 6.1% | £83 |
South West | £1,175 | 5.1% | £57 |
Midlands | £975 | 8.5% | £76 |
North | £927 | 10.0% | £84 |
Wales | £818 | 6.7% | £52 |
Scotland | £962 | 11.1% | £96 |
Great Britain | £1,347 | 5.8% | £74 |
Great Britain (Ex London) | £1,094 | 7.6% | £77 |
Source: Hamptons
Aneisha Beveridge, head of research at Hamptons, says: “The lack of supply is one of the main factors underpinning strong rental growth and this is unlikely to reverse any time soon.
“The challenge for the new government, which is keen to boost homeownership, is to increase security and the quality of homes for tenants living in the rental sector without disincentivising or pushing out more landlords.
“While some of the homes that previously would have been bought by an investor have found their way into the hands of a first-time buyer, high mortgage rates and rising rents are likely to lock out many would-be homeowners over the next few years, keeping them in the rental sector for longer.”
