2023 goes down as the year of record rents

London has seen the strongest rental growth over the last year according to an analysis by lettings agency Hamptons.  

The average rent in the capital rose to £2,425 pcm, some 11.8 per cent or £255 pcm more than in November 2022. 

Consequently, tenants in the capital paid a record £32.1 billion in rent this year, up from £28.7 billion in 2022 and £17.5 billion a decade ago.  This means that the total rent bill in London is bigger than the bill in the North of England, Midlands, Wales and Scotland combined.

Rental growth in London continues to be driven by Inner London.  Here, rents on new tenancies grew 13.2 per cent last month.  Beyond the capital, the Midlands where rents grew 10.9 per cent year-on-year, overtook Scotland as the second fastest region for rental growth last month.

However, rental growth across Great Britain continued to cool a little from its 12.0 per cent peak in August.  

Seven of the 11 regions in Britain saw the pace of rental growth slow last month. Scotland and the South East saw the biggest monthly slowdown.  Even so, rental growth has not decelerated as much as we expected given landlords’ rising costs and a lack of homes available to rent.

The agency also says the total amount of rent paid by tenants in Great Britain this year will hit £85.6 billion - over twice the level of 2010 and 10 per cent more than in 2022.

Hamptons says double-digit rental growth over the last year means the total rent bill has increased by £8 billion over the last year from £77.6 billion in 2022, marking the biggest annual jump on record.  

The total rent bill is now more than double the £40.3 billion in 2010, partly because the number of households renting has increased by 25 per cent or 1.1m over that period and partly because rents have risen too.

The average rent on a newly let home in Great Britain rose to £1,348 pcm in November, this year up 10.2 per cent or £125 pcm on the same month last year. This marked the seventh double-digit increase over the last 12 months and the strongest annual rate of growth recorded in any November since Hamptons records began in 2014.