Tenants renewing an present contract within the UK noticed their lease rise by a mean of 8.3% during the last 12 months, outpacing rental progress on a newly let property (6.4%).
This is in keeping with the newest Hamptons Monthly Lettings Index for April, which exhibits that 88% of tenants renewing an present contract to date in 2024 noticed their lease improve. This compares to 61% of landlords who achieved a better lease when a brand new tenant moved in.
However, tenants who keep put and renew their contract are nonetheless paying 13.4% or £178 pcm much less on common than somebody who has moved into a brand new house. This is decreasing the inducement for individuals to maneuver, Hamptons mentioned.
The annual tempo of rental progress on newly let properties continued to gradual in April, nonetheless rents edged up 0.8% month on month. This marked the most important month-to-month improve this 12 months, suggesting that the tempo of annual rental progress might settle round this degree.
Commenting on the newest figures Hamptons head of analysis Aneisha Beveridge mentioned:
“Many tenants had loved years of no or below-inflation lease will increase, notably when rents weren’t rising a lot on the open market and mortgage prices had been falling. Landlords had been usually content material with a small hole between the market price for his or her house and what their tenant was paying. However, during the last two years, robust rental progress on the open market has meant that the hole between market rates and what some tenants had been paying rose considerably.
“Tenants lucky sufficient to be protected against increased rents by their landlord or longer contracts are more and more seeing their rents rise. These will increase for renewing tenants are usually decrease and stretched over an extended interval than for newly let properties, usually which means tenants nonetheless pay under market price. But even so, these hikes can nonetheless add as much as a whole bunch of kilos a month.
Beveridge added that the big hole between market rates and what many tenants are paying was an enormous disincentive for them to maneuver until they need to. “Moving more and more means getting much less house for extra money. While time will ultimately shut the hole between what sitting and new tenants are paying, it could take longer if rental progress on the open market begins choosing up once more.”
