Rent growth slows as rented homes take longer to let

The rate of rent increases is slowing down, but tenants are still facing significant rises, the latest data from Hamptons reveals.

According to its figures, the average rent on a newly let home in Great Britain rose 7.1% year-on-year in February.

This is down from 8.3% in January and a peak of 12.0% in August 2023.

While growth is slowing, rents are still rising faster than inflation with a new tenant paying an extra £87 per month or £1,044 a year more compared to last year.

‘Pace of rental growth continued to cool’

The head of research at Hamptons, Aneisha Beveridge, said: “The pace of rental growth continued to cool in February.

“But rents are still some way off falling annually and tenants continue to feel the squeeze.”

She added: “Lower mortgage rates have meant landlords needing to refinance in 2024 are seeing a smaller adjustment in their mortgage costs than those who remortgaged in 2023.

“This is slowly helping to balance mortgaged investor’s books.”

Increased availability of rental properties

There are signs that increased availability of rental properties is contributing to the slowdown in rent growth with 30% more homes available last month compared to February 2023.

However, this is mainly down to homes taking slightly longer to let, not because there’s a surge in new properties entering the market, Hamptons says.

Compared to pre-pandemic levels, there are still 41% fewer homes available for tenants to rent.

Scotland is currently seeing the highest rent rises, with the average cost of a newly let property increasing by 11% year-on-year.