The cost of renting surged by 7% year-on-year in August, bringing the average to £1,438 across the whole of England, Goodlord research shows.
This is despite rents dropping by 2% month-on-month. A similar reduction happened between July and August last year, so this may be a seasonal effect rather than a sign that competition in the rental market is dropping.
William Reeve, chief executive of Goodlord, said: “Rental cost figures from the last two months closely mirror the trends we saw in 2023; a big surge upwards in July, with August figures dipping slightly but staying very high overall.
“Rents are now up 7% year-on-year, but salaries have only recorded a 1% uplift across the same time period: this is really putting the squeeze on tenants, with many likely to be facing affordability issues when they come to renew or take out a new lease.
“With interest rates starting to drop and tenant incomes failing to keep pace with rents, there’s a strong argument that we may be nearing a sustainability ceiling on the cost of rent.
“If they escalate any further, prices will prove simply unaffordable for renters – unlocking a challenging new chapter in the housing crunch.”
On an annual basis, rents in the South West have risen by a huge 13% year-on-year, followed by the East Midlands and North East, both of which saw an increase of 9%.
The West Midlands and Greater London saw the smallest year-on-year rental increases, with jumps of 2-3%.
In terms of short-term increases to rents, they surged by 12.2% in the past month in the South East, as well as by 4.9% in Greater London and 4.3% in the West Midlands.
However they saw a big monthly reduction of -23% in the North West, as well as moderate falls of 8.1% in the South West and -6.8% in the North East.