Average UK private rents increased by 8.4% in the 12 months to September 2024, according to the ONS. This was unchanged from the 12 months to August 2024.
Within the home nations, this meant an 8.5% in English rents with increases of 8.3% and 7.2% in Wales and Scotland, respectively.
Data for Northern Irish rents was only available for the 12 months to July 2024, during which time there was a 9.5% increase in rents.
Within England, rent inflation was the highest in London where increases with an average growth of 9.8%. The lowest was seen in the South West, Yorkshire and Humber with 6.3% inflation.
Many in the industry have been encouraged by this growth in rents and Harriet Scanlan, lettings manager at estate agency Antony Roberts, attributes this to improvements in supply/demand dynamics.
“The supply and demand balance still swings in favour of the landlord but tenants are now afforded more choice,” said Harriet. “We are seeing a strong steady flow of applicants looking to rent, which means landlords are enjoying little-to-no void periods.
“Landlords are still achieving slightly higher rents year on year when re-letting property to the same tenants, but not as steep as the increase in 2022/23. We are seeing some hesitation at the higher end of the market, with an increase in stock levels at £10,000-plus a month.”
North London estate agent, and former RICS residential chairman, Jeremy Leaf also attributes this to demand continuing to outpace supply. However, he points out that despite this supporting backdrop many landlords are still walking away.
“Unfortunately, too many good landlords are leaving the sector in response to concerns about increasing tax and regulatory issues,” said Jeremy. “Prospects of an improvement in choice and substantial softening in rents therefore seems unlikely for the time being at least."
A key regulatory issue that the industry may have to contend with is the Renters Rights Bill which has already been criticised for potentially undermining landlords.
Nathan Emerson, CEO at Propertymark, recognises this legislation has been drafted to protect tenants but hopes it will support landlords as well.
“While the aim of the updated legislation is to bring additional security to tenants, it’s important that there is a fair balance that inspires large scale future investment to help keep pace with the increasing rental demand,” he said.
“Since the turn of the millennium, we have seen renting more than double across the UK and in order to keep rental prices sustainable for all, there must be a plan which delivers long term sector investment and rental provision."
The ONS update also revealed house price inflation has continued to climb.
UK house prices increased by 2.8% over this time to an average of £293,000. For context, the annual growth rate was 1.8% in the 12 months to July 2024.
House prices are higher in England, where the average is £310,000 and has grown 2.3%.
The averages in Wales and Scotland are £223,000 and £200,000 respectively, having both increased 3.5% and 5.4%.
Commenting on these movements, Richard Harrison, head of mortgages at Atom Bank, said this was contributing to a busier housing market for the last few months of 2024.
With expectations high for another base rate cut soon, Richard said this could attract more landlords to the market and that the government should take advantage: “With the budget on the horizon, there is a great opportunity for the government to take real action in supporting the next generation of homebuyers.
“The ambition to deliver greater levels of housebuying is welcome, but it is unlikely to be enough on its own and lenders have a role to play too.
“Fresh thinking is needed in order to provide would-be buyers with a better chance of getting onto, or moving up, the housing ladder.”
