Rent prices increased 6.2% on an annual basis this July, shows data from Hamptons, adding that 11 regions saw record growth.
This leaves the average monthly rent bill at £1,092, up from last year.
Of special interest is inner London, where, on an annual basis, rents fell 20.3% in May and 16.5% in June. In July this rate of decline had slowed to 11%, with registered tenants growing by 13% and available properties dropping 45%.
The estate agent also points out that 10% of new tenancies this year – equivalent to 117,200 households – were to homeowners who have sold their property and are waiting to find somewhere new to live.
This is the highest level of homeowners moving into the rental market since 2016.
In Scotland, 16.4% of the rental market was taken up by this cohort, typically on a six-month or rolling contract, in Wales, 15.3% and in the North West of England, 11.8%.
The estate agent notes that the overall rental supply was 43% smaller in July 2021 than it was in July 2020, while the number of houses available across the same time frame has shrunk by 27%.
Hamptons head of research Aneisha Beveridge says: “While moving into a rented home to beat the end of a stamp duty holiday is not new, it is increasingly being used as a stop-gap by house-hunters faced with a lack of stock to buy.
“Renting before buying has also been driven by house hunters making more long-distance moves. With growing numbers looking to live in areas they know less well, many more are trying before they buy. While moving into a rented home to get to know an area often isn’t people’s preferred option, it’s nearly always more cost-effective than buying the wrong house in the wrong street.
“But while buyers face a lack of stock in the sales market, tenants are suffering from less choice in the rental market too. And this lack of stock is underpinning rental growth, which remains well above normal levels, with few signs it’s likely to significantly slow over the coming months.
“This lack of stock is also likely to suppress activity, meaning fewer homes could be let in 2021 than in 2020, despite last year’s lockdown.”
