Year-on-year rental growth across the UK private rented sector is moderating, but persistently high demand and constrained supply are keeping rents at historically elevated levels, according to the latest monthly data from ARLA Propertymark.
Regional trends were mixed over the month. Rents increased in London, the North West, the West Midlands, the South East and Scotland, while Wales, the North East, the South West, the East Midlands, the East of England and Yorkshire and Humberside all recorded monthly declines.
London led on growth, with average rents rising from £2,385 to £2,484, a 4.2% month-on-month increase. That move pushed the representative annual salary needed to secure an average-priced rental home in the capital from £70,050 to £74,520, a 6.4% year-on-year rise.
The North West posted the second-largest monthly gain, with average rents climbing from £1,110 to £1,131, up 1.9% over the month. The representative salary threshold for the region rose from £32,700 to £33,930, a 3.8% increase year-on-year.
Wales moved in the opposite direction, recording the largest monthly rental decline as average rents fell from £1,009 to £1,000, down 0.9%. It was also one of the few regions where affordability improved year-on-year, with the representative salary needed dropping from £30,510 to £30,000, a 1.7% reduction.
"The latest figures show that rental markets continue to vary considerably regionally, with some experiencing further rent growth while others remain relatively stable or have seen modest monthly reductions," said Kim Lidbury, president of ARLA Propertymark.
"London continues to lead the market, recording the strongest monthly increase in rental prices, which has also driven a higher representative salary requirement for prospective tenants. Elsewhere, regions such as the North West and West Midlands also recorded rental growth, while Wales and parts of northern England saw rents ease slightly over the month.
"While it's encouraging to see year-on-year rental growth moderating compared with the sharp increases seen in recent years, the underlying challenge remains unchanged. Demand for privately rented homes continues to significantly outstrip the supply available, meaning rents remain historically high despite slower rates of growth.
"Until more good-quality homes are brought into the sector and policies to support investment by landlords are implemented, tenants are unlikely to see the meaningful reductions in rental costs that many are hoping for."
