The Hamptons lettings agency – a brand in the Connells portfolio – says rent falls which were previously seen not only in London are now spreading to other parts of the UK.
In its latest market snapshot it says London continues to experience the most significant decline in rents, with rents on newly let properties falling for the sixth consecutive month, down 2.5% year-on-year in June. This marked the biggest annual decline in the capital since May 2021. Consequently, the average rent of a newly let property in London (£2,288 pcm) is now back to May 2023 levels.
In Inner London, average rents have decreased to their lowest level since October 2022, down 3.8% year-on-year to £2,694 pcm.
Rents also fell in Scotland and Wales last month.
The average rent for a new let in Scotland decreased 0.5% year-on-year in June, the first annual decline since December 2019. Meanwhile, rents in Wales also fell 0.9% year-on-year.
Even in the North of England, where rents had been rising fastest for most of the last 12 months, annual increases have slowed from 8.1% in June 2024 to just 1.8% in June 2025. The South has seen growth moderate to 1.7%, while the Midlands maintains a slightly stronger performance at 3.3% annual growth.
While rents on renewed tenancies continue to rise faster than new lets, the pace of growth for renewals has nearly halved to 3.9% year-on-year in June, down from 7.6% in June 2024.
This has narrowed the gap between new lets and renewals to its smallest point since summer 2021.
The average rent on a renewed tenancy in Great Britain (£1,283 pcm) now costs 6% or £86 per month less than a new let, compared to a 12% or £151 per month gap in June 2023. This convergence reflects how landlords have been passing higher costs onto tenants and keeping renewal rents closer to market rates.
In the longer term, Hamptons says there’s likely to be rental growth from 2026 onwards.
Its latest report states: “The structural supply shortage, combined with relatively high mortgage rates, will prove inflationary in the medium-term. For example, there were 34% fewer homes available to rent across Great Britain in the first half of 2025 than in the first half of 2019. The implementation of the Renters Rights Bill and upcoming EPC requirements are also likely to put upward pressure on rents.”
Yesterday we reported that in light of the weaker labour market outlook, Hamptons was downgrading its rental growth forecasts for 2026 and 2027 by 0.5% each year. Rents across Great Britain are now expected to rise by 3.5% in Q4 2026 and 3.0% in Q4 2027, still running slightly ahead of projected inflation and earnings growth.
The agency concludes: “Despite the downgrade in our forecasts, rents are likely to rise by 18% between the end of 2022 and the end of 2027. This will cost the average tenant in Great Britain an extra £2,650 each year.”
