UK Market Report: Average Rents Up 8.7% Annually in May 2024 | RWinvest Skip to content

Average UK Rents Up 8.7% Annually in May 2024

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    ONS Rental Index: What’s Happening to the UK Property Market?

    According to the latest ONS House Price Index, average UK private rents were estimated to have increased by 8.7% year-on-year to May 2024 – down from 8.9% in the 12 months to April 2024 but below the record-high annual rise of 9.2% in March 2024.

    Year-on-year, average rents in England rose to £1,301 (8.6%), £736 (8.5%) in Wales, and £957 (9.3%) in Scotland.

    Let’s see how this affects buy-to-let property in the UK going forward.

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      How Has UK Rental Inflation Changed?

      Overall, rental inflation in England climbed to £1,301 (8.6%) in May, £736 (8.5%) in Wales, and £957 (9.3%) in Scotland. In Northern Ireland, it grew by 10.3% in March.

      In England, average rents rose by the highest amount in London, at 10.1%. This was lower than the record-breaking 11.2% reported two months ago, the highest annual inflation since data were first released in January 2006. The North East had the lowest average increase at 6.1%.

      The highest monthly rents were seen in Kensington and Chelsea, with an average of £3,387. The lowest average rents were in Dumfries and Galloway, Scotland, where tenants paid an average of just £480.

      According to the May 2024 RICS UK Residential Market Survey, tenant demand seemed to improve as time progressed, with the net balance for the month rising to +35% – a considerably more moderate figure than the +53% average observed throughout 2023. At the same time, landlord instructions were “more or less flat,” reaching a net balance of -3%. RICS notes that this marked the first time since August 2022 that this measure had moved into neutral territory.

      In the future, RICS indicates that rental prices are likely to continue increasing even if the speed of growth is slower than what has been observed in the last 18 months.

      Gareth Atkins, Managing Director of Lettings at Foxtons, believes demand will continue to improve in the coming months.

      He said: “As we move into peak summer lettings season, supply is growing. Renter demand is also growing, mirroring 2023’s Q2 trends with a 20% month-on-month increase.”

      “If demand follows last year’s trends through summer, Q3 will be a bustling market. The announcement of the general election at the same time has resulted in the shelving of the Renters Reform Bill. This means there will be no immediate changes to fixed-term tenancies or any of the other provisions within the bill. Renters Reform is likely to be reintroduced under a new government, but for now, it’s business as usual.”

      Read More: Want to start making money in property? Take a look at our ultimate buy-to-let property portfolio guide today!

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      How Have UK House Prices Changed?

      According to the ONS UK House Price/Rent Index, average prices in the UK increased by 1.1% to £281,000 in the 12 months to April 2024. This represented an increase from the annual figure of 0.9% in March 2024 and was the second consecutive month of annual price growth following 8 months of average drops.

      While some first-time buyers may be concerned that rising house prices lead to more difficult entry points, various experts have suggested that it may actually be one of the best times to invest in a property.

      The Guild of Property Professionals suggests that while rising house prices may concern some buyers, those looking to buy now may find reassurance in the reduced likelihood of their property dropping in value after buying.

      Discover how to invest in property in the UK with our updated buy-to-let guides:

      Average UK Rents Up 8.7% Annually in May 2024

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      Reece Pape

      Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.

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