The gap between rents in the North and South of England has closed to its smallest level since 2013, according to Hamptons’ latest lettings index.  

Last month, the average new tenancy in the South cost £1,318 pcm, 37% more than in the North where rents averaged £960 pcm – but the gap has narrowed from 43% last August and down from a peak of 55% in November 2021.

Rental growth across Great Britain has been cooling for the last 12 months, reports Hamptons. Last August, growth for newly let properties peaked at 12%, five times higher than the pre-Covid average (2015-19) of 2.5%, while last month, rental growth across the country stood at 5%, the lowest rate since April 2021.

Fallen

These figures mask a regional divide; in the South the rate of growth has fallen from 8.7% to 5% over the last year, while in the North, rents are still rising 9.6% year-on-year, around the same pace as last year (9.7%).

The gap has also fallen in cash terms, with rental growth in the North of England running at nearly twice the pace of homes in the South. Last month, the average rental home in the South cost £357 pcm more than one in the North, down from £378 pcm in August 2023.

Inflation

However, after adjusting for inflation, in real terms rents have only risen 10% across the country since 2019, equating to an average of 2% each year.  

Aneisha Beveridge, head of research at Hamptons, says despite the pace of rental growth slowing, it’s remained resolutely in positive territory, triggered by landlords’ higher costs. “Nearly half of the average monthly rent a landlord receives now goes towards costs,” she explains. “While recent Budgets have mostly left investors alone, landlords will be watching October’s announcement more closely than usual to get a steer on what they can expect from a Labour government.”

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