Rents drop for the first time since 2020 – Hamptons

The cost of renting a home in Great Britain has fallen for the first time since 2020, research reveals.

According to Hamptons, the average rent for newly let properties fell by 0.2% in July compared to the previous year, marking the first annual price drop since the height of the Covid crisis in August 2020.

Despite this dip, the average monthly rent remains substantial at £1,373, which is 34% higher than the £1,023 recorded five years ago.

Relentless rent rises

The firm’s head of research, Aneisha Beveridge, said: “After five years of relentless rent rises, the market has paused for breath.

“Rents on new lets have dipped for the first time since 2020, as falling mortgage rates and a cooling economy ease pressure on the market.

“But for sitting tenants, the story is different.”

She added: “Renewal rents continue to climb, with landlords keen to keep pace with inflation and close the gap with market rates.

“It’s a sign that while demand may be softening, the underlying cost pressures haven’t gone away.”

Rent falls not uniform

Hamptons says the rent price decline is not uniform across the country with seven of the 11 regions tracked by them still reporting rising rents.

The East Midlands leads with a 3.4% increase, followed by the West Midlands at 2.7% and the South West at 2.6%.

However, Greater London stands out with a notable 3% year-on-year drop, the steepest fall since May 2021 and the seventh consecutive month of declines.

Wales, the North East, and Yorkshire and the Humber also saw rents fall, with rents dropping by 0.8%, 0.3% and 0.2% respectively.

Big rent inflation slowdown

The North of England has seen a marked slowdown, pulling the national average into negative territory.

Just 12 months ago, the North East recorded a 10.6% surge in rents, while Yorkshire and the Humber and the North West saw increases of 6.7% and 8.6% respectively.

This rapid deceleration highlights a cooling market in these areas.

In contrast, tenants renewing their contracts face a different reality as rents for renewed tenancies rose by 4.5% in July, with every region seeing increases.

The North West led with a 7.2% rise, far outpacing the growth for new lets.

The national average for renewal rents now stands at £1,290 per month, just £83 shy of the average for new tenancies, the smallest gap in four years.

Renewal tenancies rise

The regional disparities paint a complex picture with Greater London’s new lets averaging £2,288 per month, while renewals are slightly lower at £2,207, up 3.9% from last year.

Inner London sees even sharper declines for new lets at 5.4%, with rents at £2,703, while renewals rose by 3.3% to £2,717.

In contrast, the South West and Midlands show robust growth for both new and renewed tenancies, with the East Midlands reporting £1,010 for new lets and £916 for renewals, up 5.8%.