Rental Growth Stabilising with only one area seeing rents fall

Rental growth seems to be stabilising, says lettings agency Hamptons.  

It says the cost of a newly let home in Great Britain rose to an average of £1,337 pcm in May 2024, 6.3% or £79 pcm more than the same time last year. This marked the third month in a row where year-on-year increases averaged around 6%. 

Meanwhile, rental growth for tenants renewing their contracts continued to rise, with average renewal rents up 8.8% year-on-year in May from 8.3% in April.

The slowing of national rental growth for newly let homes has been primarily led by London, where the pace of annual growth fell to 3.9% in May 2024, the lowest rate since November 2021. 

Inner London was once again the only area to see rents fall on an annual basis (-2.3%), for the second month in a row. The average tenant here agreed to rent a new home for £3,003 pcm in May (table 2), the lowest level for 14 months and £171 pcm cheaper than in November 2023 when rents in Inner London peaked.  There were 20% fewer new tenants looking to rent a home in Inner London compared to the same month last year, the largest annual fall in any region. 

Smaller homes are seeing bigger rent rises than larger homes.  

Hamptons says this reflects affordability challenges that are pushing tenants in search of more affordable homes.  May 2024 marked the first time in 11 months when rents for newly let one-beds (7.6%) rose faster than two-beds (6.2%). 

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