According to research from Hamptons, tenants who are renewing their tenancy agreements are facing rent increases that bring their payments closer to the higher rents seen in new lettings on the market.
In Great Britain, those who have renewed their lease in the past year have faced an average rent increase of 8.3%, which is more than the 6.4% increase for newly let properties.
Despite these hikes, tenants who remain in their homes are still paying about 13.4% or £178 per month less than new renters, with an average monthly rent of £1,151.
Aneisha Beveridge, Hamptons’ head of research, states: “For years, many tenants enjoyed stable or below-inflation rent increases, when market rents were stable and mortgage costs were declining.
“Landlords used to be okay with a small difference between what they charged and the market value. But with recent strong rent increases on the open market, the gap has widened considerably.
“Tenants with the protection of their landlords or longer-term agreements are increasingly seeing their rents go up. These renewal increases are typically smaller and spread out more than for new lettings, and often still below market rates. However, they can result in a significant monthly expense.
“The substantial disparity between current market rates and what many renewing tenants pay discourages them from moving unless necessary. Moving often results in spending more for a lesser home. Although the difference between what incumbent and new tenants pay will eventually narrow, it may persist if rental market growth resumes.”
Across Great Britain, the number of rental homes available has increased by 28% from last year.
Conversely, there is a 40% drop in available rental homes compared to April 2019, as more landlords are selling properties than purchasing.
In Inner London, rents for newly let properties dropped by 2.8% from last year, making it the only region to see a decrease.
This marks the first annual decline since lockdown restrictions eased at the end of 2021, following a period where rents there surged by 35%.
