The gap between rents in the north and south of England has fallen to its lowest level in more than a decade, the latest Hamptons Lettings Index has shown.
Covering the month of August, the letting agent’s research has found that the average rent in the north of the nation is almost 10% up year-on-year - outpacing the 5% growth seen in the south. This has closed the price gap between the areas to 37% (£357), which is the smallest difference since Hamptons began its index in 2013.
It comes as landlords are abandoning the buy-to-let sector due to diminishing returns. The subsequent drop in the stock of properties to let means there is currently a high number of prospective tenants competing for each new rental home that comes to market.
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The government is also set to shake up the lettings market with new regulation. It has placed its Renters’ Rights Bill before Parliament, which will resurrect the Conservative government’s plans to ban no-fault evictions. There will still be some circumstances where landlords can evict tenants.
Hamptons: rents in north have ‘surged by almost half since Covid’
In its monthly Lettings Index, Hamptons has found the rent gap between the north and south of England has closed substantially over the past year. At 37%, the difference between rents in the two areas has narrowed from 43% a year ago, and is down 18 percentage points from a peak of 55% in November 2021.
Based on a three-month rolling average of achieved rents, the research found that the average new tenancy in the south came in at £1,318 per calendar month (pcm). This compared with £960pcm in the north - an area that comprises of the North East, North West and Yorkshire & Humber regions.
While the south saw rental growth peak at 8.7% year-on-year in August 2023, this rate has slowed significantly to 5% during the same month in 2024. The north has mostly maintained the pace of increases, growing 9.6% this August compared to 9.7% a year ago.
In nominal terms, the typical cost of letting out a home in the north has surged by an average of 48% since 2019. In the south, rents are up 34%, with this figure also forming the GB average. It means tenants across England, Scotland and Wales have seen a £349 average rise in monthly rents - adding £4,184 a year for the typical tenant.
When adjusted for inflation, this GB-average falls to 10% in real-terms. Northern rents are up 24% through this metric, with the North West leading the way on 29% real-terms growth.
Greater London has seen some of the lowest rates of growth, with prices having gone up 27% numerically, but just 3% once inflation was taken into account. For Scotland, nominal rents went up 48% and 24% in real-terms, while in Wales - despite a nominal increase of 19% - actual rents were 5% down on 2019’s figures.
Commenting on the findings, head of research at Hamptons, Aneisha Beveridge, said: “Much like house prices, the rental north-south divide has been closing for the last five years. The narrowing reflects the cyclical nature of the housing market with house prices in the north of England rising 31%, nearly double the southern rate. These figures have been mirrored in the rental market, with rents in the north of England quickly playing catch up.
“But it's only been in the last year that the gap has really started to narrow beyond the point we’ve previously seen. This has been driven by the slowing of rental growth across southern England caused by greater affordability pressures. While tenants in the south have seen weaker growth in percentage terms, in cash terms, they’ve faced big rises. A 10% increase in south of England rents would cost tenants an extra £1,581 a year, £428 more than for a tenant in the north.”
Beveridge added that average rents have continued to climb due to the “higher costs” landlords are facing. She said that “nearly half” of the rent they get is being put towards costs.
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