New report from Hamptons

Here’s a summary of the key points from the report by lettings agency Hamptons:

  1. Slowed Rental Growth: Despite a slowdown, the average newly let rent in Britain has risen by 6.7% over the past year, significantly lower than the peak of 12% in August 2023.
  2. Rental Prices Remain High: Rental prices are still 31% higher than before the pandemic, with the North West experiencing a particularly steep increase of 42% above pre-pandemic levels.
  3. West Midlands Hits £1,000 Threshold: The West Midlands has become the first region outside the South of England where the average rent exceeds £1,000 per month. Rent rises in this region remain in double figures, contrasting with other areas.
  4. Inner London Sees Minimal Rise: Inner London saw the smallest rental rise of just 0.4% over 12 months, although rents have increased by 17% since the pandemic began.
  5. High Energy Bills: Tenants are facing high energy bills, reaching a seven-year high last month, equivalent to an additional month’s rent annually. However, a 12% reduction in the energy price cap this month and further falls expected in June may alleviate this burden.
  6. Long-Term Increase in Rental Prices: Over the past decade, rental prices have increased by 54%, while energy bills have risen by 46%. This means tenants are paying nearly £5,993 more annually in rent and energy bills compared to 10 years ago.
  7. Financial Pressures on Tenants: Tenants have faced financial strain from rent increases alongside significant hikes in energy and food bills over the last two years.
  8. Potential Policy Changes: Minimum Energy Performance Certificate (EPC) standards for rented homes may not be introduced by the current government due to falling energy prices in the short term. However, a potential change of government could lead to renewed pressure on landlords to improve energy efficiency in the medium term.
  9. Supply and Demand Dynamics: Although the number of rental homes on the market has increased by 30% compared to last year, and the number of potential tenants has decreased by a fifth, rents have not fallen. This suggests longer-term supply constraints and increased demand.
  10. Continued Pressure on Rents: Despite a slowdown in rental growth, rents are still creeping upwards, especially outside central London, driven by long-term tax and interest rate pressures on landlords.
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