Lettings agency Hamptons reports that the average rent of new lettings last month was up only 1.8% compared to 12 months ago. This is the slowest rate of growth since October 2020. However, over the same period tenants renewing existing contracts saw their rents rise 6%.

For eighteen consecutive months the rental growth for new lettings has declined leaving the average tenant moving home in Britain paying £1,372 a month. The current monthly rise is the slowest rate of growth since October 2020. The average rent at renewal is £1,263 per month, £109 less than a tenant signing a new contract. 

In recent years, sitting tenants have seen their rents increase more slowly than tenants who moved home. Over the last five years, tenants renewing a contract have seen rents rise by 26.5%. This compares to a 34.0% increase for homes where a new tenant moved in.

Landlords continue to increase the rent paid by existing tenants to close the gap with the value achieved if a new tenant were to move into the property.  London has the widest gap in the country between rent increases for tenants moving into a new property (actually down 0.7%) and renters renewing contracts (up 6.8%). 

But it is not just London where newly let homes have seen slower rental growth. Rental growth has slowed across the North East, North West and Yorkshire & Humber too. Twelve months ago the three regions of Northern England had annual rental growth of 8.4% compared to the current 3.5%.

Hampton reports that the effect of higher rental stock levels has been a factor behind cooling rental growth. They predict that that this effect will tail off and that the rate of rental growth will begin to increase in 2025.  

There were 3% more homes for rent in January 2025 compared to the same time last year, marking the smallest annual increase since August 2022. Analysis of long term data shows the number of rental homes on the market remains well below pre-Covid levels. There are 39% fewer homes available to rent than there were in January 2019.  Hamptons also note that January 2025 also marked the first time landlord purchases fell below double digits.  Landlords accounted for just 9.6% of purchases in Great Britain which is the lowest figure since at least 2009 when their records began.