New figures showing no slowdown in the rate of private rental inflation is just additional “misery” for tenants, a leading financial analyst says.

This week the government announced that average UK private rents increased by 8.6% in the 12 months to July 2024, unchanged from in the 12 months to June 2024.

Average rents increased to £1,319 (8.6%) in England, £748 (7.9%) in Wales, and £965 (8.2%) in Scotland, in the 12 months to July. 

London was the English region with the highest rents inflation, at 9.7%. This was unchanged from the 12 months to June and was below the record-high annual rise of 11.2% in March 2024.

Rents annual inflation was lowest in the North East, at 6.1% in July 2024. However, this was a joint record high for the North East and was up from 5.9% in June 2024. In July 2024, the average rent was highest in London (£2,114) and lowest in the North East (£676).

Sarah Coles, personal finance chief at business consultancy Hargreaves Lansdown, says: “Rental misery is piling on the pressure for another month, with rents up an eye-watering 8.7%. It’s not quite as bad as the record high back in March, of 9.2%, but that’s like consoling someone who has just broken a leg by telling them it’s not as bad as breaking two.

“Landlords continue to sell up in the face of higher mortgage costs, tougher tax rules and the likelihood of more stringent legislation. 

“Meanwhile, growing tenant numbers make it harder to get hold of a property, even if you’re prepared to pay sky-high prices. It’s difficult to see how things will ever get any better.

“For a renter, their greatest hope may be to get onto the property ladder and out of the rental market altogether. This is a massive ask at a time when rents are soaking up such a huge proportion of your income.”

Separately, a survey from the Mortgage Advice Bureau says that nearly a third (32%) of prospective buyers are delaying their property purchases, with the number rising to 36% for first time buyers.

The research has found that increased housing prices (39%), higher interest rates making monthly repayments unaffordable (29%), and the cost-of-living crisis (28%) are among the key factors impacting homebuying plans. The challenge of higher interest rates is significant, with one in four (25%) prospective buyers and 26% of first-time buyers finding it harder to get their mortgage approved due to increased costs.

A fifth (20%) of prospective buyers have taken on more than one job to cope with the financial strain, with this figure slightly higher for first time buyers (22%). Additionally, one in six first time buyers (17%) have had to arrange longer mortgage terms than initially planned. The same number (17%) have also found it necessary to borrow more to afford their homes.

Other contributing factors include the cost-of-living crisis impacting credit scores (affecting 21% of prospective buyers and 25% of first-time buyers), and concerns over job security or potential redundancies (affecting 12% of prospective buyers and 13% of first-time buyers). 

MAB also claims: “Rent increases are also exacerbating the situation, making it more difficult for 23% of buyers overall, and a significant 36% of first-time buyers, to save for a deposit.”

Only a small fraction of prospective buyers (9%) and even fewer first-time buyers (5%) report that nothing has impacted their homebuying plans.