Rent increases slow but demand remains exceptionally high

UK rental growth slowed to a modest 0.2% increase from April to May, according to the latest HomeLet Rental Index.

However, despite falling rental prices across several UK regions, industry experts warn that it’s “business as usual” for the Private Rented Sector (PRS), with demand “out of control” and rents “unaffordable” for many.

In a rare glimmer of hope for the rental sector, rents decreased in the North East (-1.6%), South West (-1.4%), Greater London (-1.3%), and Yorkshire and Humberside (-0.5%). Furthermore, rental growth slowed to 6.9% across the country, reaching its lowest rate since August 2021.

However, HomeLet’s experts warn that it is far too early to talk of green shoots of change. Especially with a General Election looming on the horizon and average UK rents reaching an all-time high of £1,297 per month.

HomeLet and Let Alliance CEO, Andy Halstead, said: “As summer approaches it looks like business as usual in the private rental sector: Shortage of supply, demand out of control, and high rents that are, in many instances, unaffordable.

“Meanwhile, the politicians focus on attempting to win votes with blatant untruths. This government has not supported our sector and I suspect the next government will be equally unhelpful.

“Professional letting agents make the best of a difficult situation. However, it is no wonder we are seeing record levels of letting agent consolidation, and landlords considering alternative investment options.”

What’s the outlook for the rental market for the rest of 2024?