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UK private rents climbed at a near-record rate to 8.4% in the year to August, with London leading the surge, according to official figures.
The increase in private rents is almost four times that of inflation, which rose 2.2% in August, figures from the Office for National Statistics (ONS) showed.
In August, the average private rent in Great Britain was £1,286 per month. This is £100 (8.4%) higher than 12 months previously.
Average rents increased to £1,327 in England — an increase of 8.5% — £752 (8.5%) in Wales, and £969 (7.6%) in Scotland, in the 12 months to August 2024.
In Northern Ireland, average rents increased by 9.9% in the 12 months to June 2024. In England, rent inflation was highest in London at 9.6% and lowest in the South West at 6.4%.
Read more: UK inflation rate holds steady at 2.2% ahead of interest rate decision
The average rent was highest in London at £2,129 and lowest in the North East at £682.
ONS head of housing market indices Aimee North said: “Rental prices continue to climb at a near-record rate, although the pace of the increase has slowed slightly. London again saw the fastest growth in rents, with the slowest rise in the South West of England.”
Nathan Emerson, CEO at Propertymark, said:“The rental market continues to operate with a very strong headwind, as many landlords battle increased overheads and uncertainty regarding future legislation. Landlords have faced a complex combination of high inflation, interest rates, maintenance costs and a more demanding taxation structure over the last few years.
“In turn, this has had a profound impact on their ability to operate and in some circumstances has forced good landlords to make the difficult choice to sell up and leave the sector.”
Last month, the highest average rent was in Kensington and Chelsea, London at £3,418 and lowest in Dumfries and Galloway in Scotland at £483. Excluding London, the local area with the highest average rent in August 2024 was Elmbridge in the South East at £1,822.
Meanwhile, average UK house prices increased by 2.2% to £290,000, which was down from 2.7% in the 12 months to June 2024. It is also the fifth monthly rise in annual house price inflation in a row.
Read more: Average UK house price rises as interest rate cut boosts market
The ONS reported that average house prices increased in England to £306,000 — a rise of 1.6% in the last year. In Wales house prices rose by 2% to £218,000, and in Scotland they were up 6% to £199,000.
The North East was the English region with the highest house price inflation in the 12 months to July 2024, at 3.8%.
“Annual house price growth slowed this month. The North East saw the highest annual growth while London was the only region to show annual price falls,” said North.
Nick Leeming, chairman of Jackson-Stops, said: “For the first time, house prices are reflecting a cautiously positive afterglow from Labour’s election victory and showing a promising picture for the start of Autumn. Post-election stability coupled with the first base rate cut in four years — which has steadied mortgage rates — have renewed buyers’ intent and underpinned stronger house price growth.
“Buyers’ confidence will always, to varying extents, be influenced by the wider economic picture. It is essential the new government introduces polices to address the supply and demand imbalance, but at a rational rate. The market needs consistency and certainty, not knee-jerk reactions and short-term solutions.”
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