Rental growth cools rapidly for new lets, but rises for renewed tenancies

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 is part of the Connells Group. The data is taken from lettings figures from the group’s 1,200 branches. 

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.

London has the widest gap in the country between rent increases for tenants moving into a new property (actually down 0.7%) and renters renewing contracts (up 6.8%). This is the second month in a row that London recorded year-on-year falls in rental growth, with average rents on a newly let home down on the same time 12 months ago.

Read the full article at Letting Agent Today