UK Average Rents Fall for First Time in 5 Years

Average rents for newly-let homes in Britain have dropped for the first time in about five years, according to property firm Hamptons.

In July, rents on new tenancies fell by 0.2% year-on-year — the first annual decline since August 2020, during the height of the Covid-19 pandemic. Even with this small dip, the typical monthly rent of £1,373 is still around 34% (£350) higher than in August 2020.

Hamptons noted that while overall rents have slipped, some regions are still seeing growth, with the Midlands and South West of England leading rent increases.

London recorded the sharpest falls, with a 3.0% annual drop in July — its seventh consecutive monthly decline and the largest yearly decrease since May 2021. Wales saw its third straight month of annual rent falls, while the North East and Yorkshire and the Humber also posted drops in July.

The North of England has experienced the most dramatic slowdown in the past year. Just 12 months ago, annual rent growth was 10.6% in the North East, 6.7% in Yorkshire and the Humber, and 8.6% in the North West.

For tenants renewing contracts, the average rent stands at £1,290 per month — £83 less than the rate for a new tenancy. This is the smallest gap in four years, as landlords keep renewal rents closer to market levels and in line with inflation.

Aneisha Beveridge, Hamptons’ head of research, said that after five years of relentless rent growth, the market is taking a breather. New-let rents have dipped for the first time since 2020, driven by lower mortgage rates and a cooling economy. However, renewal rents continue to rise as landlords try to keep up with inflation and close the gap with market rates, signalling that underlying cost pressures remain.

Hamptons’ lettings index, based on achieved rather than advertised rents, draws data from the Connells Group.

Average monthly rents on newly-let homes (annual change):

• London: £2,288 (-3.0%)

  • Inner London: £2,703 (-5.4%)

  • Outer London: £1,983 (-0.4%)

• East of England: £1,255 (+1.6%)

• South East: £1,465 (+0.2%)

• South West: £1,267 (+2.6%)

• East Midlands: £1,010 (+3.4%)

• West Midlands: £1,084 (+2.7%)

• North East: £850 (-0.3%)

• North West: £1,037 (+1.9%)

• Yorkshire and the Humber: £932 (-0.2%)

• Wales: £843 (-0.8%)

• Scotland: £1,055 (+0.7%)