The average rent in the UK is now £1,220 per month after 8.3% growth in the last year. The highest average rent in the UK is in London (£2,119) while the North East has the lowest monthly rent (£695).
The average UK rent for new lets has now reached £1,220, an +8.3% rise in the average UK rent over the last year.
This equates to UK renters paying an extra £1,100 per year (or £90 per month) compared to a year ago.
However, this rate of inflation is lower than we’ve seen at any time during the last two years. In 2023 alone, rental growth dropped from +11.4% to +8.2%.
Average rental prices in the UK: last 3 months
| December 2023 | November 2023 | October 2023 | |
|---|---|---|---|
| Average monthly rent in the UK | £1,220 | £1,200 | £1,166 |
data to December 2023, published in February 2024
Average rent by region
Average rents vary across the country, from a high of £2,119 per month in London to £695 per month in the North East.
Rent growth has now slowed in all regions except the North East. Average rents for new lets in the region increased by +9.3% in the last year, compared to +8.1% the year before.
The table shows current average rents for new lets across UK regions and how much they have changed in the last year.
| Region | Average monthly rent | Change on a year ago (%) | Change on a year ago (£) |
|---|---|---|---|
| London | £2,119 | +6.4% | +£130 |
| South East | £1,325 | +9.3% | +£110 |
| East of England | £1,162 | +9.3% | +£100 |
| South West | £1,076 | +8.1% | +£80 |
| West Midlands | £905 | +8.7% | +£70 |
| Wales | £880 | +9.4% | +£80 |
| East Midlands | £860 | +9.2% | +£70 |
| North West | £847 | +10.2% | +£80 |
| Yorkshire and the Humber | £799 | +7.7% | +£60 |
| Scotland | £791 | +11.6% | +£80 |
| Northern Ireland | £733 | +3.7% | +£30 |
| North East | £695 | +9.3% | +£60 |
December 2023, published in February 2024
Rental inflation in Scotland boosted by rent controls
In September 2022, the Scottish Parliament introduced a rent cap of 3% on annual rises to existing tenancies.
While intended to reduce cost-of-living pressures for renters, it means landlords are now going higher at the start of a tenancy to cover their costs and the limited increases during the contract.
This leads to Scotland having the highest level of annual rental inflation in the UK at +11.1%. The average monthly rent in Scotland stands at £790, £82 more than a year ago.
However, this is already a slower rate of growth than the highs of +13.7% back in February 2023, but we still expect Scotland to see faster rental growth than anywhere else in the UK in 2024.
Fast-increasing rents in Glasgow (+11.4%) and Edinburgh (+12.5%) are encouraging renters to look into neighbouring areas, leading to large rent increases beyond main cities. Average rents in three local authorities adjacent to Glasgow and Edinburgh breached the £1,000 mark in 2023 (East Dunbartonshire, East Renfrewshire and East Lothian).
Rental inflation is much less dramatic in rural parts of Scotland, with Aberdeenshire, Moray and the Highlands all recording growth below +6%.
Rental inflation slows down in inner London
Rental inflation has slowed down in London and some southern cities in the last 12 months, giving some relief to renters in the expensive South of England.
The largest moderation is in London, where rental inflation has dropped from +16.1% a year ago to +6.4% today.
Rental growth has slowed the most in Inner London boroughs. A year ago, we were seeing rises of up to +20.9% in Tower Hamlets, which has now dropped to +5%.
However, the experience of renters in outer London will be different, as there is still double-digit rental inflation in many areas. Rents have risen by more than +13% in more affordable eastern boroughs of Havering, Redbridge and Barking and Dagenham.
These reductions suggest landlords are becoming more realistic in pricing their rentals and may be taking cost-of-living struggles into consideration when setting new rates, which tend to be exacerbated for those in the rental market.
What factors influence rental prices?
One of the most important factors that influences rental prices is the level of demand from renters versus supply of rental properties.
A chronic mismatch between supply and demand has been the defining feature of the UK rental market for three years. It’s the main reason rental inflation has been so sharp during that time.
Rental growth is also impacted by earnings growth – a strong jobs market and subsequent wage rises keeps demand high and means tenants can weather rent increases.
In the last year, higher mortgage rates have also impacted rents as they’ve prevented more would-be first-time buyers from owning a home and boosted demand for rental homes.
What are renters doing to minimise the impact of higher rents?
Some renters have escaped the steepest rises by staying in their existing homes.
Year-on-year rises for established tenancies rose at the slower rate of 6.2% according to the Index of Rental Prices from the Office for National Statistics.
When renters move and are faced with higher rents and a limited supply of homes on the market, they’re more commonly considering renting smaller homes, moving to cheaper areas or house-sharing to reduce costs.
House-sharing reduces the cost of housing per person but it comes at the personal expense of privacy and space. Data from the Resolution Foundation found private renters have experienced a 16% reduction in floor space per person over the last 20 years.
What’s next for the rental market?
We believe that the rental market is now past peak rental growth after starting to cool in the final months of 2023.
We expect a further slowdown in rental growth in 2024 as worsening affordability keeps demand in check and supply improves slowly. There are already signs asking rents have overshot in some of the most expensive markets that are showing resistance to higher rents.
Slower increases will be welcome news to renters who have often faced steep hikes in the last two years.
Key takeaways
- The average UK rent has risen 8.3% on average in the last year, adding £1,100 to the average annual bill
- UK renters are now paying £1,220 per month on average, ranging from £695 in the North East to £2,119 in London
- Rental growth slowing to single digits is a sign we’re past peak growth after nearly two years of 10%+ increases
- Scotland continues to register the highest rental growth for new lets despite rent controls
- London is seeing growth slow the most as rents hit an affordability ceiling
- We expect a further slowdown in rental growth in 2024 as worsening affordability keeps demand in check