The pace of rental growth is slowing according to data from Hamptons, which has highlighted a particular cooling within new lets.
In January, rental growth of new lets was up by an average of 1.8% from the year before according to the Hamptons Letting Index.
This saw the average monthly rent across the UK being £1,372. With London removed - where average rents are £2,329 - this fell to £1,126.
Rental growth was healthier for renewed tenancies with rents growing by an average of 6% over the same year-on-year period.
Monthly rents were on average lower than those renewed, with £1,263.
Again with London removed - where average renewed rents are £2,244 - this fell to £1,012.
Though landlords have continued to increase rents paid by existing tenants in order to close the gap with the value achieved by new tenants, these have risen more slowly.
Over the last five years, tenants renewing a contract have seen rents rise by 26.5%.
This compares to a 34% increase for homes where a new tenant moved in.
London has the widest gap in the country between rent increases for tenants moving into a new property (-0.7%) and renters renewing contracts (6.8%).
However, rental growth has also moderated across Northern England with the gap between the North and South narrowing.
Over the last 12 months the three regions of Northern England saw rents rise 3.5%, down from 8.4% a year ago. Meanwhile rental growth in the three Southern regions outside London (South East, South West and East of England) totalled 3.1%, down from 6.2% in 2024.
Commenting on these findings, Hamptons head of research Aneisha Beveridge said this was a reflection of supply constraints making the PRS more competitive for landlords.
“What happens to rents on newly let homes tends to play out in the renewal market around 18 months later,” said Aneisha.
“So we expect tenants renewing their contracts to face smaller increases in 2025 than they did in 2024.
“Over the past five years, the lag between the two markets has saved sitting tenants an average of £6,641 each year, a saving which would have been wiped out had increases in renewal rents tightly tracked new lets.”
In addition, landlord purchases dipped below double digits in January 2025.
During this month landlords accounted for 9.6% of purchases in the UK, the lowest figure since 2009 when Hampton’s records began.
Aneisha added: “New purchases by landlords have been depressed by increases in stamp duty rates towards the end of last year and the prospect of tighter regulation in the form of the Renters’ Rights Bill.
“While purchases by landlords haven’t completely dried up, it’s looking like higher stamp duty rates have reduced the share of homes sold to landlords by between 10% and 20%.”
