Almost nine in 10 tenants (88%) renewing an existing contract so far in 2024 saw their rent increase by an average of 8.3% over the last 12 months, outpacing rental growth on a newly let property, revealed the latest Hamptons data.
According to the agency’s monthly lettings index for April, only 61% of landlords achieved a higher rent when a new tenant moved in, down from 80% in 2023 — with average rental growth on a newly let property reaching 6.4% in April.
While more sitting tenants have seen rent increases, those who renew their contract are still paying 13.4%, or £178 pcm less on average than someone who moved into a new home.
Overall, the annual pace of rental growth on newly let homes in the UK continues to slow down in April, with growth falling from 6.7% in the year to March to 6.4% last month.
However, rents edged up 0.8% month-on-month, the largest increase this year.
In terms of stock level, while there are 28% more rental homes on the market than last year, the rate of increase is slowing.
Inner London was the only region in the country to register a fall in average monthly rents, which have dropped by 2.8% — this is the first time they have fallen on an annual basis since the easing of lockdown at the end of 2021.
Meanwhile, Midlands saw the highest year-on-year average monthly rent increase of 9.8%.
Aneisha Beveridge, head of research at Hamptons, said: “Many tenants had enjoyed years of no or below-inflation rent increases, particularly when rents weren’t rising much on the open market and mortgage costs were falling.
“Landlords were often content with a small gap between the market rate for their home and what their tenant was paying — however, over the last two years, strong rental growth on the open market has meant that the gap between market rates and what some tenants were paying rose significantly.
“The large gap between market rates and what many tenants are paying is a big disincentive for them to move unless they have to; while time will eventually close the gap between what sitting and new tenants are paying, it may take longer if rental growth on the open market starts picking up again.”
