The latest data from Hamptons indicates a cooling in the UK rental market, with average rents on newly let properties across Great Britain increasing by 8.3% year-on-year in January.
This rate, the slowest in 13 months, signals a significant shift from the double-digit growth seen in recent months, marking the first time in half a year that growth has reverted to single digits.
In January, 59% of landlords managed to secure higher rents with new tenants, a decrease from the 81% peak in January 2022 and 79% in January 2023.
The rental market is currently experiencing a 34% increase in available properties compared to last year, though this is still 43% lower than the figures from the same period in 2019.
Despite the slowdown, rental growth is expected to continue outpacing inflation for the remainder of 2024, maintaining a “sticky” trend.
The slowdown is primarily attributed to a significant deceleration in London, where annual rental growth dropped from 17.1% in August to 8.1% in January, the lowest in two years.
Aneisha Beveridge, head of research at Hamptons, said: “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.”
Beveridge further explained the impact of mortgage rate increases on rental prices, noting that the higher costs have been partially passed on to tenants.
However, the capacity of tenants to absorb further rent increases is being limited by the broader financial pressures they face.
