Rents fall for third month in a row

Rental prices in the UK have dropped for the third month in a row, according to new figures reported by This is Money. 

The HomeLet Rental Index, which uses data from more than one million renters, shows that in January average rents fell by 0.6%, following a 0.9% drop in December. So, since October, the average rent has fallen from £1,283 a month to £1,260.

This follows three years of month-on-month rises which drove average rent up by 32% from £974 to £1,283 a month between October 2020 and 2023.

In January, every region in the UK saw average rents drop except for the East Midlands, West Midlands and the South West.

HomeLet's figures tally with those of property firm Hamptons that show average rents on newly-let properties rose at their slowest pace for 13 months, up by 8.3% year-on-year across the UK In January. This compares to growth of 12% in August and 10.2% in December.

The property firm says that while there are 34% more properties on the market available to rent compared to this time last year, it’s a reflection of the longer time it’s taking to let properties rather than an actual increase in new rental homes on the market. It points out there's still a shortage of available properties to let, 43% less compared to 2019.

Rents falling the most in London

Hamptons figures show that the rental market in London is leading the way when it comes to rent falls.

The average monthly rent for a property in Greater London has fallen by more than £100 from a high of £2,192 in October to £2,081 a month as of January - a drop of 5%. Hamptons suggests this could be down to an increasing number of available homes to let in Greater London bringing prices down.

According to London letting agent Chestertons, there are 41% more rental properties currently available in London than there were in January 2023, and because of this, tenants have more choice and are under less pressure to make a decision quickly. 

Data from Rightmove supports this, showing that the average length of time a property is listed on the platform increased from 33 to 39 days. Ultimately this has led to a larger number of landlords lowering asking prices to attract tenants.

Rental price outlook for 2024

Although this news seems positive on the surface for renters, HomeLet experts are doubtful this is the beginning of a downward trend, and instead predict that rent costs will rise by 5-10% by January next year.

Are you struggling to make your rent?

Find budgeting tips in our blog on how to manage rising rents and mortgage interest rates. 

And why not use our free benefits calculator to check you’re getting all the financial support you're entitled to.

If you’re on a low income or claim benefits, you may be able to get a council tax reduction of up to 100%. Check to see if you’re eligible.

Local councils have also been given a share of £842m to help families struggling with the cost-of-living crisis. Visit your local council’s website to see what’s available in your area. But be quick as the Household Support Fund is due to close at the end of March

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