Renewed tenancy rents soar but new-let rents stagnate

The average new-let rent last month was up only 1.8% compared to 12 months ago, the slowest rate of growth since October 2020.

That’s the verdict from lettings agency Hamptons, which says this is the eighteenth consecutive month that rental growth has slowed, leaving the average tenant moving home in Britain paying £1,372 a month.

Meanwhile, tenants renewing a contract continued to see rents rise much faster than tenants moving into new properties.  

The average rent for a tenant renewing their contract rose 6.0% across Great Britain over the last year, more than three times faster than rents agreed on newly let properties. This brings the average rent at renewal to £1,263 per month, £109 per month less than a tenant signing a new contract. 

Landlords continue to increase the rent paid by existing tenants in order to close the gap with the value achieved if a new tenant were to move into the property.  With the exception of Scotland, where there are caps on rent hikes within a tenancy, every region saw renewal rents rise more quickly than for tenants moving into a new property.

Despite this, in recent years, sitting tenants have generally seen rents rise more slowly than tenants who moved home.  Over the last five years, tenants renewing a contract have seen rents rise by 26.5%.  This compares to a 34.0% increase for homes where a new tenant moved in.