Strong rental growth pushed the average monthly rent on a newly let property outside London up to £1,002 pcm in April, passing the £1,000 per calendar month (pcm) mark for the first time, new figures show.
The latest price increase recorded by the Hamptons Lettings Index, which uses data from the Countrywide Group to track changes to the cost of renting, comes less than three years (34 months) after the average rent for the whole of Great Britain (which includes London) last passed the same milestone in July 2020.
Over the last year, the average rent outside the capital has risen 7.8%, which puts it 26% higher than on the eve of the Covid pandemic in February 2020. This annual increase will cost the average tenant an extra £868 a year if they were to move to a new home outside of London.
The average rent now exceeds £1,000pcm in three of the 10 regions outside of London (East of England, South West and South East)
Back in February 2013 when the Hampton lettings index began, the average tenant who moved into a new home in regions outside of London paid £677pcm, £325pcm less than in April 2023. Average rents here have passed four £100pcm milestones since then, three of which have occurred since Covid. The £900pcm mark was passed just 21 months ago in August 2021.
Across Great Britain as a whole, rents rose 11.1% year-on-year in April to reach a new high of £1,249pcm. This marked the second strongest month for rental growth across the country on record, only to be outpaced by the annual increase of 11.5% recorded in May 2022.
Overall, rents across Great Britain have risen 25% since the eve of Covid, costing the average tenant an extra £2,962 each year.
The capital continues to post the strongest rental growth. The average rent on a new let in Greater London hit £2,210pcm in April, 17.2% higher than the same month last year. This meant that April also marked the first time that the average monthly rent in the capital surpassed £2,200pcm, which will cost the average tenant an extra £3,895 a year if they were to move into a new rental home.
Rents in inner London continued to fuel rental growth. The average monthly rent in inner London crossed the £3kpcm mark for the first time in March (£3,047).
In April, the average Inner London rent rose to £3,138, 24.9% or £625pcm higher than the same month last year. This means the gap between Inner and Outer London rents has returned to £1,104 (or 54%), up from a post-Covid low of just £221 (or 13%) back in June 2021.
Rents in outer London posted double-digit growth for the third consecutive month. They rose 15.1% year-on-year in April, with rents passing £2,000pcm for the first time back in November 2022.
Despite this, rental growth across London since Covid has lagged most of the country. The average rent in inner London has risen 21% since February 2020, while in Outer London it’s up 22%. The South West, North West and North East have recorded the strongest growth since then, with rents up 31%.
Last month, average rents reached new records in seven out of Great Britain’s 11 regions. Wales, the South West and the North East were the only regions where average rents remained slightly below their peak. Like London, Scotland also saw double-digit rental growth (12.8%) in April for homes where a new tenant moved in.
Aneisha Beveridge, head of research at Hamptons, commented: “It was back in July 2020 that the average rent across the whole of Great Britain, including London, last passed the £1k pcm mark. But just 34 months later, soaring rents since Covid have meant that the average rent in the regions outside of London has passed that same milestone. While rents nationally saw their second-biggest annual rise in April, they’ve still failed to keep pace with wider inflation for nine of the last 12 months.
“With rents on the open market rising quickly, tenants will face the choice of staying put or moving to a smaller home in a more affordable area. While anyone choosing to sit tight tends to face smaller rental increases than those moving home, they are not immune. Affordability constraints will likely hit the brakes on rental growth at some point this year, however, it’s unlikely to slow considerably due to the number of landlords looking to pass on their rising costs.”