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Rental growth hits 12% in August

rents grow

The cost of renting a new property was 12% higher than the year before in August, the fastest pace since the Hamptons Lettings index began in 2014.

In real terms tenants are paying an average of £140 per month more than they were at the same time last year.

August’s rate of growth surpassed the previous record of 11.5% which was set in May 2022.

Aneisha Beveridge, head of research at Hamptons, said: “Each passing month has ushered in a new rental market record. Rents have risen more in the last 12 months than they did between 2015 and 2019.

“While the current pace of rental growth is unsustainable long term, many mortgaged landlords are being squeezed just as tightly as tenants.

“Higher rents are only going some way towards helping mortgaged landlords’ balance their books, rather than boosting their profit. This is one of the reasons we haven’t seen large numbers of new landlord’s come into the market.

“The fallout from higher mortgage rates continues to buffer the rental market. Higher interest rates have encouraged some leveraged landlords to conserve cash and invest beyond bricks and mortar.

“With the Bank of England raising rates to encourage debt repayment instead of additional borrowing, the 30,000+ fall in the number of outstanding UK buy-to-let mortgages since November shows landlords are playing ball.

“However, it’s a mixed blessing for tenants. With most mortgages repaid by the sale of the home, renters are being short-changed. And this is adding fuel to the rental market.”

Breaking rental growth down by region, they’ve seen the biggest increase in Greater London, rising by 17.1% year-on-year to bring the average to £2,332 per month.

After that comes Scotland, with an increase of 13.4%.

This is the highest rise in the country in a decade, and it means tenants have to pay more rent north of the border than in the Midlands, at £935 per month in Scotland compared to £922 in the Midlands.

Wales has the lowest rental growth, just 3.4%, followed by the South West, at 6.3%.