It is hard to recall a time when the UK’s monthly average rent was a stable figure. The amount new tenants are charged has been surging, frequently amounting to double-digit annual rises. For example, the Evening Standard found average rent rises of 9% in London since October 2022, and 17.1% the year before

This type of uplift has provided landlords with a crumb of comfort during a time of punishing running costs and higher mortgage repayments. Now, as we work our way through 2024, there are signs that rents may be following the path of house prices – moderating after a period of intense inflation.

LandlordBuyer is a big fan of the HomeLet Rental Index and we view the statistics monthly for a good snapshot of the UK’s rental market. Its latest report shows the average UK rent dropped 0.9% in December, to £1,288 per calendar month. This followed a small drop in the average rent in November, leading us to question whether a concrete pattern is emerging.

When looking at HomeLet’s analysis in more detail, every UK region had seen an annual rent decrease, except for the East Midlands and the West Midlands. In London, the average monthly rent decreased 2.2% – the biggest drop of any region - with a new cost of £2,127 per calendar month. In Scotland, monthly rents dropped 1.2%, while Wales saw a more marginal decrease of 0.1%.

The HomeLet Rental Index also discovered worrying news on the affordability front. In December 2023, renters paid 33.4% of their income on rent – the highest December figure since 2017. For comparison, tenants spent 31.4% of their take-home pay on rent in December 2022 and this figure creeping up is a worry.

Of course, there are plenty of predictions that rents will continue to rise in 2024, with Savills predicting 6% uplift and 5% floated by JLL, but there has been an interesting note of caution from Rightmove’s Christian Balshen – one that dials directly into affordability.

Speaking to landlordtoday.co.uk, he said “many tenants will have a cap on what they can or are prepared to pay in rent, and an increasing number of landlords are having to reduce their advertised rent, suggesting more are reaching this cap.”

It’s a sentiment echoed by Zoopla’s Richard O'Donnell. Speaking to the Evening Standard, he commented that ‘there are signs that high asking rents have overshot affordability levels’ and that ‘the UK is past peak rental growth. London will lead the slowdown, acting as a drag on the UK growth rate.

Some of the signs that Richard alludes may have come from Propertymark’s latest Housing Insights Report. Released in December 2023, it highlighted how around 25% of its letting agent members reported a fall in rent values in November. This figure was up from the 14% noted in October and mere 4% in September.

Propertymark’s report also revealed how the number of new prospective tenants registered per member branch remained static in November, while the average number of new tenancies agreed also decreased.

The LandlordBuyer team is here to help you make sense of the latest rental reports, so get in touch. We can help you establish whether we’re at the start of a seismic rent value correction or whether seasonal trends have caused a blip in the figures.

Get in touch for advice and an appraisal of your current buy-to-let situation. Or for a free cash offer, head to our online offer request form. If you’d like a better feel for the landlords we help, please take a look at our case studies

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