Rents still rising but growth cooling according to Connells data

Published on 22nd October 2024, 5:44am

The average rent for a newly let property in Britain hit a high of £1,384 pcm last month – but the pace of growth is cooling.

That’s the verdict from Connells’ high end brand Hamptons. 

Average rents rose 4.5% year-on-year, down from 5.0% in August and 11.7% in September

Last month was the first since March 2021 when no region recorded a double-digit percentage rental increase.

Back in September 2023, six of the 11 regions in Britain recorded +10% annual rental growth. 

In August this year the North East was the only region to record double-digit rental growth of 12.1%, a figure that slowed to single digits (8.1%) in September.

London tenants who moved into a new home faced the smallest rental increases in

percentage terms. Rental growth in Greater London has slowed from a peak of 17.2% in August 2023 to 2.1% in both August and September 2024.

However, Hamptons says there are few signs of rental growth slowing much further in the capital given that these figures have stagnated in recent months. 

And even though the pace of growth has slowed, tenants in the capital have faced big increases in cash terms. The average rent in Inner London reached £3,284 pcm in September 2024.

Separately, Hamptons says that some  total, 666,831 properties are now held inside a buy-to-let limited company structure across England and Wales. 

This figure has increased 175% from 242,249 a decade ago. 

But despite most new purchases going into a limited company structure, only around 15% of all rental homes owned by private landlords are held in such a way.

Prior to 2016, the limited company structure tended to be the preserve of larger landlords. However, the growing tax advantages for higher-rate taxpayers have

attracted the attention of smaller investors. 

So far this year, 54% of new purchases have been made by companies who are making their first, second or third purchase.

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