UK Rent Gap Shrinks: North Surges While South Stalls

According to new research, the buy-to-let rent gap between the north and south is narrowing and is on track to disappear completely.

Over the past five years, average inflation-adjusted rents have risen by 10 per cent. However, rents in the north have surged by 24 per cent while rent rises in London and the south have barely reached double digits, according to a study by property consultants Hamptons.

The report also highlights Wales is the only place where rents have fallen in real terms - down 5 per cent in five years.

Greater London rents have a fingertip hold on positive territory, having seen just 3 per cent of real rental growth since 2019, equating to an average of just 0.2 per cent each year.

After accounting for inflation, the North West tops the rental growth league with a 29 per cent increase since 2019.

Hamptons put the current average UK rent at £1,369 a month - up 5 per cent in a year. Rents in Wales are the cheapest - averaging £802 a month after recording 2.1 per cent growth in the year.

UK rents - August 2024

Source: Hamptons

The Hamptons report says: “Tenants in the south have seen weaker growth in percentage term. In cash terms, they've faced significant rises. A 10 per cent increase in South of England rents would cost tenants an extra £1,581 a year, £428 more than a tenant in the north.

“Despite the overall deceleration across the country, rental growth remains positive, driven by landlords' higher costs. Nearly half of a landlord's average monthly rent now goes towards expenses. This persistent growth, albeit slower, underscores the ongoing challenges in the rental market, balancing tenant affordability with landlord profitability.”

Tenants spend a third of their income on rent

Rent data from the Office for National Statistics (ONS) shows average buy-to-let rents increased by 8.4 per cent in the year to the end of August - down from 8.6 per cent in July.

ONS average rents were £1,327 a month for England and £752 for Wales.

Rents rose fastest in London (9.6 per cent) and the slowest in the South-West (6.4 per cent).

Regionally, rents in the East Midlands, West Midlands and the North West were bunched on 9.2 per cent growth. 

Tenant referencing firm Homelet dropped a rent report for August that confirmed UK average rents were £1,325 a month -  a 5.1 per cent annual increase.

The highest rents are in London - averaging £2,148 a month, while the lowest is £715  in the North-East, with renters spending 32.6 per cent of household income on rent.

The report noted the rate of rent growth across the country is slowing.