Nationally, the cost of moving into a rented home rose by just 2.0% over the last 12 months, says Hamptons.
This was the smallest increase since October 2020 when rents were falling in the aftermath of the Covid outbreak. This reflects rents rising from an already high level.
That’s because in December 2023, rental growth stood at 10.2%.
Average rents have risen by 31.2% in Great Britain since October 2020, from £1,042 per month to £1,367, costing the average tenant an extra £3,912 per year.
Scotland continues to have the fastest-growing rents in the country, with prices on a new let up 5.5% over the last 12 months. Rental growth in the Midlands and the North of England tracked closely behind. Here, rents rose by 5.2% and 4.8%, respectively, in December (table 1).
Meanwhile, Greater London was the only region where rents fell (-0.2%) over the last year (table 1). This is partly because rents rose at double-digit pace in December 2023 (11.4%).
There were more rental homes on the market in 2024 than in 2023, with numbers up 10% annually. However, there are strong signs that the recovery in stock levels has peaked, given numbers were up 34% year-on-year back in January 2024.
The number of homes on the market still stands 13% lower than during the same time in 2019, a figure which has trended downwards in more recent months and is likely to put pressure on rental growth in 2025.
“The pace of rental growth continues to cool, and rents are now rising at a similar rate to house prices” notes Hamptons’ research chief Aneisha Beveridge
“And just like house prices, the bulk of the growth is coming in Northern England. But the recovery in stock levels looks to have peaked, keeping rental growth positive.
“While new purchases by landlords held up in December, early signs in January suggest the new 5% stamp duty surcharge is starting to bite, which could fuel more rental growth in the coming months.”