Average rents on newly let properties across the UK rose 8.3% year-on-year in January, the slowest pace for 13 months, revealed the latest Hamptons monthly lettings index.
This is the first time in six months that the rental growth ran at a single-digit pace.
While eight of the 11 regions in Great Britain saw the pace of rental growth slow between August 2023 and January 2024, the slowdown was primarily driven by London — annual rental growth in the capital more than halved between August and January, falling from 17.1% to 8.1%, marking the slowest rental growth in two years.
The data also revealed that fewer landlords are securing a higher rent when re-letting their properties — in January, only 59% of landlords re-letting a home scored a higher rent than before, compared to a peak of 81% in January 2022 and 79% in January last year.
According to the report, landlords in Yorkshire and the Humber were most likely to achieve an uplift, with 66% doing so.
Nevertheless, the share of landlords able to achieve higher rents remains above the pre-pandemic average.
While the data shows a 34% year-on-year increase in rental homes available on the market at the end of January, Hamptons clarified this is due to the increased time it takes to let a property, rather than a boost in stock.
Looking ahead, the firm stated the stock levels are unlikely to recover to pre-pandemic levels anytime soon.
Aneisha Beveridge, head of research at Hamptons, said: “Last summer looks like it may have been the high watermark for rental growth — since then, fewer landlords have been putting up the rent; where they have, in cash terms, monthly increases have tended to be in double rather than triple figures.
“While the upward pressure on rents seems set to weaken in 2024, particularly since mortgage rates have come down, wider pressures on landlords mean rental growth will remain stubbornly sticky.
“Reduced returns coupled with the additional time and financial costs stemming from rental reform have squeezed the numbers of new landlords; this looks set to keep rental growth running ahead of inflation this year.”
