Despite experiencing its lowest rate of growth in four years, rental prices have increased by 31.6 per cent since November 2020, according to new data from property firm Hamptons.
Average rents on newly-let properties across Britain rose by 2.6 per cent annually in November, marking the slowest yearly increase since November 2020.
The average monthly rent for a newly-let property now stands at £1,382, representing a £35 increase compared to the previous year.
Head of research at Hamptons, Aneisha Beveridge said: “The current level of growth is similar to pre-Covid times when rents typically rose between two per cent and three per cent a year.”
Rental prices have increased by 31.6 per cent since November 2020
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Despite the recent slowdown, the rental market has seen substantial growth over the past four years.
This significant increase highlights the long-term pressure on the rental sector, even as current growth rates moderate.
Aneisha Beveridge said: “Tenants renewing contracts continue to see increases well above these levels, but the pace of these increases will slow as their rents climb closer to market rates.”
Looking ahead to 2025, Rightmove predicts a further four per cent rise in new seller asking prices, supported by anticipated falls in mortgage rates with the worry of stamp duty which will be implemented next year.
From April, the ‘nil rate’ band for first-time buyers in England and Northern Ireland will reduce from £425,000 to £300,000.
In London and the South East, sellers of small properties are attempting to trade up or sell before the deadline to avoid higher stamp duty charges.
Meanwhile, first-time buyer properties in more affordable areas, such as the North East of England, are showing resilience, with prices increasing by one per cent this month.
These areas are expected to be less affected by the upcoming stamp duty changes.
Average rents on newly-let properties across Britain rose by 2.6 per cent annually in November
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The current housing market shows a seasonal dip, with new seller asking prices dropping by 1.7 per cent or £6,395 in December to £360,197 across Britain. Despite this monthly decrease, prices have risen by 1.4 per cent compared to the same period in 2023.
Director of property science at Rightmove, Tim Bannister said: “We are now looking ahead to the traditional Boxing Day bounce in home mover activity, which has increasingly become a key date in the housing market calendar.
“After the important first three months of the year in 2025, a lot depends on how quickly normal activity is resumed with higher stamp duty in England.
“A (Bank of England base rate) cut and some mortgage rate falls early on in the year would help to settle the market and provide a boost to sentiment and consumer confidence.”
