Rental costs have soared to their highest level in two years, with an average monthly rent across England hitting £1,309 in June - an increase of £80 compared to the same period last year. This significant hike is not just a blip on the radar but a stark reality for tens of thousands of tenants struggling to keep up with rising living costs.
According to Goodlord's latest rental index, year-on-year rental inflation surged by 6.5% in June - the highest rate recorded since August 2024. This comes after a brief dip in April and May, which had seen inflation at its lowest point in ten months. With this sudden jump, many are left wondering if renters' purchasing power will continue to erode.
William Reeve, CEO of Goodlord, suggests that the recently enacted Renters' Rights Act may be partly to blame for the surge. By limiting landlords to a single annual rent increase via Section 13, the Act could be creating an incentive for property owners to set higher initial rents for new tenancies. This strategic move aims to mitigate potential future income limitations - but at what cost to tenants?
Rents are rising across all regions in England, with Yorkshire and the Humber experiencing the most substantial annual increase of 16% since June 2025. The South West and North East also recorded double-digit annual rental inflation, exceeding 10%, while the East Midlands saw a 7.7% year-on-year rise.
Month-on-month changes were particularly stark in some areas - with the South West witnessing the largest increase of 29.5% between May and June. The North East saw a 15.7% jump over the same period, and Yorkshire and the Humber recorded a 12.6% rise. In contrast, the West Midlands experienced the smallest monthly increase of just 0.5%.
With economists and market observers closely watching these developments, it remains to be seen whether June's figures signal a temporary market recalibration or the start of a sustained upward trend in the private rented sector - with potential implications for overall inflationary pressures and future interest rate decisions by the Bank of England.