Tenants are now facing bigger rent rises when they renew their contract than when they move into a new rental home, disincentising many to move home at all.

Hamptons’ monthly letting index reveals that while the rent on newly let homes increased by 6% in the 12 months to April, the average rent paid by a tenant renewing their contract jumped by 8%. This means those renewing a contract are paying £1,151 per month on average - 13% less than a tenant signing a new contract.

So far this year, 61% of landlords who let their home to a new tenant have been able to secure a higher rent, down from 80% in 2023, while 88% who renewed an existing contract increased the rent.

With tenants finding themselves materially better off by staying put, Hamptons’ analysis suggests that in 2023/24 the number of renters moving home will be about 17% below the pre-pandemic average, falling below one million moves.

Disincentive

Head of research Aneisha Beveridge (says) says the large gap between market rates and what many tenants are paying is a big disincentive for them to move. “Moving increasingly means getting less home for more money,” she adds.

“While time will eventually close the gap between what sitting and new tenants are paying, it may take longer if rental growth on the open market starts picking up again.”

The annual pace of rental growth on newly let homes in Great Britain continued to slow in April, falling from 6.7% in the year to March to 6.4% last month. However, rents edged up 0.8% month on month, the largest increase this year. Strong rental growth means that the average one-bed now costs the same as the average two-bed 20 months ago.

Downward pressure on stock levels also persists; Hamptons says there were 40% fewer homes available to rent than in April 2019 as private landlords sold more properties than they bought.