UK Private Rents Fall for First Time in Five Years as Cooling Mortgage Rates Ease Pressure on Tenants
Millions of renters across the UK are experiencing a welcome shift in the property market as average private rents fall for the first time in half a decade, according to the latest Hamptons Lettings Index.
After five years of above-inflation rental increases, falling mortgage rates have helped cool the UK rental sector, providing relief to tenants facing sustained cost-of-living pressures. New data reveals that in July, the average rent on a newly let property in Great Britain fell by 0.2% year-on-year – the first annual drop since August 2020, during the height of the Covid-19 pandemic.
The decline was most pronounced in Greater London, where average rents dropped 3% year-on-year, reflecting a significant rebalancing in one of the country’s most competitive rental markets. Wales also saw rents fall for the third consecutive month, alongside decreases in the Northeast and Yorkshire and the Humber.
Despite this cooling trend, seven out of 11 UK regions still recorded annual rent increases, with the East Midlands up 3.4%, the West Midlands rising 2.7%, and the Southwest increasing 2.6%.
“After five years of relentless rent rises, the market has paused for breath,” said Aneisha Beveridge, Head of Research at Hamptons. “Rents on new lets have dipped for the first time since 2020, as falling mortgage rates and a cooling economy ease pressure on the market. But for sitting tenants, the story is different – renewal rents continue to climb as landlords seek to keep pace with inflation and close the gap with market rates. It’s a sign that while demand may be softening, underlying cost pressures haven’t gone away.”
The Hamptons Lettings Index, based on achieved rather than advertised rents, uses data from the Connells Group to provide one of the UK’s most comprehensive insights into rental market trends.
This shift in the market comes as both landlords and tenants adjust to changing economic conditions, with analysts noting that the balance between supply and demand will be critical in determining rental affordability in the months ahead.
