New data from Hamptons shows that newly agreed rents across Britain fell by 0.4% year-on-year in August — the largest annual drop since the pandemic and the joint second-largest fall since records began in 2011.

This marks the ninth consecutive month of rents rising more slowly than inflation, giving tenants rare financial relief after years of sharp increases. With CPI inflation running at 3.8% in July (and likely higher in August), rental growth is now placing downward pressure on headline inflation.

London leads the decline

• London: -3.3% annually, with Inner London down 5.8%, the steepest fall since May 2021.

  • Average rents are now £179 per month below their October 2024 peak.

• Yorkshire & Humber: -0.5%

• North East: -0.2%

• Other regions still saw growth, but at a slower pace.

Why it matters

Hamptons’ Head of Research, Aneisha Beveridge, explained:  “After several years of rapid rental growth, the tide is finally turning… landlords are having to adjust to attract tenants. What we’re seeing now is a real-terms fall in rents, with inflation and wages outpacing rental growth.”

Landlord perspective

• The dip reflects affordability limits: stretched tenants are less able to absorb further rises.

• After years of rents consistently outpacing inflation, landlords are now facing pressure to recalibrate expectations.

• While this offers tenants short-term respite, it also underscores the tightrope landlords walk: balancing affordability for tenants against rising costs for mortgages, maintenance, and compliance.

For policymakers, softening rents may ease inflationary pressure. For landlords, it signals a market adjusting to economic headwinds — and the need to remain competitive to avoid voids.

📊 Market Watch: Where Rents Are Still Rising

While London and parts of the North have slipped into decline, seven regions are still seeing growth – albeit at a slower pace:

• South West: +4.0%

• East of England: +3.8%

• West Midlands: +3.2%

• South East: +2.9%

• Scotland: +2.5%

• East Midlands: +2.3%

• Wales: +1.7%

What this means for landlords:

• Demand remains strong outside the capital, particularly in commuter belts and university towns, where rental stock is constrained.

• Affordability ceilings are being tested: double-digit rises seen in 2022–23 are now unsustainable, so moderate increases are the new norm.

• Tenants are shopping around more: flexible landlords who offer competitive pricing or improved property standards are more likely to avoid void periods.

⚠️ Takeaway: Growth hotspots still exist, but the market has clearly shifted. Success now depends on realistic pricing and tenant retention strategies, rather than assuming continual upward rent pressure.