HomeLet Rental Index

The Rental Index represents the largest, most insightful and up-to-date view on the UK’s private rented sector.

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UK Average rent over £1,000 per month for the first time on record

The average rent price in the UK is now £1,007, up 5.9% Year-on-year

Excluding London, the UK average is now £861, up 8% from last year

London price in decline for over a year, yet finally shoot of recovery with an increase, now up to £1,607 PCM

All regions except London have seen increases compared to pre-Covid rental prices

All 12 regions show a YOY increase

Scotland shows the largest monthly increase, up 4.4% to £738 PCM

Further details and data tables can be found in the full report.

The largest and most reliable source of average rental data in the UK

The Rental Index data is qualified through high-quality tenant referencing, carried out on behalf of over 4,500 UK letting agents. As a group we reference over 1m tenants a year, enabling reporting on newly agreed tenancy applications, with historic data for over 13m tenancy applications.

Commenting on the latest data, Andy Halstead, Group Chief Executive Officer said:

“Throughout the Coronavirus pandemic, the Government rightly took measures to protect tenants but didn’t go far enough to balance the protection for landlords. It’s a continuation of the theme that we’ve seen for many years, with landlords being penalised by higher taxes and increased complexity in obtaining possession of their properties.

“In simple terms, increased costs for landlords mean increased costs for tenants. Some landlords have exited the market whilst the stamp duty holiday has stimulated the sales market, impacting the stock level. These are all factors driving an increase in rental values for new tenancies, which are way above the rate of inflation.

“The private rented sector plays a critical role in the UK’s housing market. As restrictions begin to ease, the flexibility provided by rentals will be crucial to mobility across the UK and as a means to access affordable housing that fits the varying needs of a diverse range of tenants.

“The sector works best when there’s a mutual balance between tenants, landlords and letting agents. The Government can’t treat the rental market as an afterthought. Policies that solely focuses on homeownership will only deepen the issues in the UK’s housing market.

“Some people might be shocked to see the average UK rental price tip over the £1000 mark, yet supply and demand dynamics will only continue to drive rental prices upwards for the rest of the year, and we’ll see more records broken in 2021.”

Commenting specifically on London, Andy said:

“The impact of Brexit on international tenants has been exacerbated by the pandemic, noticeably in London. Positively, this month we can see the demand for rental properties in London growing, not only through the increase in rents but also the volume of new lets that we’ve seen in the Capital.

“After a year where demand and rental values have dipped, we can expect to see growth again as the impact of the pandemic gradually subsides.”

Andy Halstead, Group Chief Executive

The average rent in the UK is now at a record high of £1,007, up 5.9% on the same time last year, and up a massive 9% on this time two years ago.

London sees the first price increase for over a year, with an annual variance increase of 1.5% to £1,607 PCM. However, the price is still lower than pre-COVID, as the average was £1,611 PCM back in June 2019.

Excluding London, the average UK rent price is 8% higher than last year, up to £861 PCM, showing a 10% growth on pre-Covid prices.

The South West of England saw the highest annual price rise, with the current average price of £948 PCM marking a 10.5% increase on this time last year, and a 12.6% increase on pre-Covid levels.

Scotland saw the most significant MOM price rise, with the average price rising 4.4% to £738 PCM in June.

Elsewhere, rent prices in the North East fell by 2.3% compared to last month to an average of £547 PCM, one of only two regions to see a MOM price dip.

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Methodology

The HomeLet Rental Index incorporates a methodology designed in conjunction with a professor at the London School of Economics. The methodology factors in important elements, such as property type and geography, to create mix adjusted averages. This makes Britain’s most comprehensive rental market benchmark even more insightful. The methodology has been applied retrospectively to our historical rental market data to ensure that the Rental Index can continue to be used to provide analysis of trends in the private rental sector.

The index and average prices are produced using HomeLet’s mix adjusted rental index methodology. This helps to track the representative rental values over time, which factor in changes in the mix of property types and locations of rented properties.

Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs. The data used in the HomeLet Rental Index is aggregated to regional, county and city level only. This ensures that all property or individual records remain strictly anonymous.

The HomeLet Rental Index is prepared from information that we consider is collated with careful attention, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue this report. The HomeLet Rental Index may not be used for commercial purposes; we shall not be liable for any decisions made or action taken in reliance upon the published data.

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