Rents have risen significantly over the past few years due to a combination of factors such as demand exceeding supply, the pandemic’s impact on living and working arrangements, and landlords passing on increased costs from higher interest rates. With the recent decrease in interest rates, some landlords have seen their mortgage costs drop, reducing the need to raise rents further.
The data, derived from Connells estate agency, indicates a welcome slowdown for tenants who have faced substantial increases in housing costs. However, the rent decreases are not yet widespread. Greater London experienced the steepest decline, with a 3% annual drop in July, while some regions like the East Midlands, West Midlands, and south-west England still saw rent increases.
Despite this small annual decrease, the average monthly rent for a new lease remains £350 higher than in August 2020. For existing tenants, rent increases continued, with average renewals up by 4.5% year on year in July.
Aneisha Beveridge, head of research at Hamptons, commented, “After five years of continuous rent rises, the market is taking a break. However, renewal rents continue to increase.”
