Market outlook: rents

• Rental growth has been high in recent years, but the pace is now slowing. Leading indicators are starting to show slowdown in tenant demand and an improvement in supply.

• UK annual rental growth is currently at 5.2%, however this has almost halved from 10.3% in July 2023.

• Affordability is increasingly critical. Renters paid an average 32.7% of their income on rent in July, slightly weakened in all but two UK regions over the last year.

• Rental growth expected to ease back in 2024, broadly in line with earnings growth forecasts and is forecast to moderate to 2.5% by 2028. Source: Dataloft by PriceHubble, HomeLet July 2024, HM Treasury, Nationwide, CBRE, Savills, Knight Frank, Rightmove, JLL Chestertons, Zoopla. August 2024