Private rents up 3.8% in August – ONS

“Higher rents do not automatically mean stronger returns, and that is shaping the conversations we are having with landlords. 

“Many are reassessing where they deploy capital and looking more closely at the role individual properties play within a wider portfolio. 

“That is widening the gap between landlords who are actively professionalising and restructuring their portfolios, and those deciding the economics no longer justify remaining in the sector. 

“For those continuing to invest, it is increasingly about owning the right properties rather than simply owning more of them. 

“We are seeing particular interest in HMOs and other specialist property types where investors believe there is an opportunity to build more resilient income over the longer term.

“Build to rent is helping add much-needed stock in some parts of the market, but it cannot replace the breadth of supply provided by individual and professional landlords. 

“We need a diverse rental sector if we are going to meet tenant demand. 

“That means recognising that rental supply depends not just on tenant demand, but on whether landlords can see a sustainable return after costs.”

Chris Storey, chief commercial officer at Atom Bank: 

“This data marks a turning point in house point growth. Given the latest Lloyds house price index – which is more up to date – has reported the first annual house price fall in three years, we are likely to see further falls play out in next month’s ONS data. 

“Against the current backdrop, the market has been driven by those who feel moving is a necessity, rather than by aspirational buyers.

“Having risen to 3.1% today, inflation is forecast to increase in the months ahead. 

“The expectation is that the Bank of England will increase Base Rate, which will further dampen enthusiasm among buyers. 

“We would ordinarily expect activity to pick up now following the summer holidays and as buyers attempt to complete deals before Christmas, but don’t be surprised if the market remains more subdued than usual.”

Nathan Emerson, chief executive at Propertymark: 

“Across the year, we have seen overall rental inflation generally slow down. 

“However, that doesn’t take away from the reality of monthly rental costs continuing to rise year on year, albeit at a slower pace than previously.

“Based on today’s data, the average salary required for many people to rent a property typically sits at £42,000, which, in the current economic climate, represents a significant challenge for many. 

“We remain in a situation where, on average, we are currently seeing around eight people register interest per available property across many letting agency branches, demonstrating a sizeable mismatch between supply and real-world demand.

“For many reasons, renting a property has become an ever-more-popular option across the UK, and it’s important that the sector attracts sustainable and continued investment to keep pace with growing demand.”