The UK property market remains a hotbed of activity, with private rents soaring by 9.1% in the year to November 2024, pushing the average rent to £1,319 across Great Britain. Meanwhile, house prices are steadily climbing, with the average UK home costing £292,000, a 3.4% rise from the previous year. These shifts highlight significant challenges for tenants and opportunities for landlords navigating a rapidly evolving market.
Rising rents squeezing tenants
Private renters are bearing the brunt of climbing rents, especially in London, where rent inflation hit a record-breaking 11.6%. Yorkshire and the Humber saw the lowest increase at 5.7%, but even there, renters are feeling the pinch. According to Sarah Coles, head of personal finance at Hargreaves Lansdown, “Rapid rent rises will have sent renters into a cold sweat, panicking about how on earth they can afford to stretch their budget far enough to make ends meet.”
The impact of these hikes is stark: private renters now spend 39% of their monthly income on rent, compared to mortgage payers who spend 19%. With many renters struggling to save, Coles added “On average, renters have just £79 left at the end of the month, making saving for a deposit incredibly difficult.”
However, Alex Upton, Managing Director at Hampshire Trust Bank, pointed out that this situation highlights opportunities for landlords to invest in refurbishment or conversion projects. “These strategies not only help maximise rental yields but also make better use of existing housing stock to meet the strong demand for quality homes,” Upton explained.
House prices steady despite economic uncertainty
The sales market, meanwhile, has been buoyed by summer optimism. November saw a 3.4% annual increase in house prices, bringing the UK average to just £1,000 shy of its record high from August. James Stevenson, Area Director at Foxtons, noted “November saw an unusually busy London property market, driven in part by first-time buyers racing to beat the March 2025 stamp duty deadline.”
However, not all regions are seeing uniform growth. According to Jonathan Hopper, CEO of Garrington Property Finders, “Prices fell in four out of nine English regions compared to the previous month. While there’s no shortage of buyers, those planning a move are increasingly pragmatic and price-sensitive.”
This cautious buyer sentiment reflects wider economic challenges, including inflation and stubbornly high mortgage rates. Even so, Hopper remains optimistic: “This is a healthy market, with plenty of both supply and demand.”
Landlords navigate a shifting landscape
For landlords, the market dynamics present both opportunities and hurdles. Rental demand remains robust, with eight in ten landlords reporting strong tenant demand in the third quarter of 2024, according to Pegasus Insights. However, the lettings market is becoming increasingly competitive. Gareth Atkins, Managing Director of Lettings at Foxtons, said “With an average of 15 renters per new listing in 2024, success requires proactive, intelligent market engagement.”
The policy environment is also shifting. Nathan Emerson, CEO at Propertymark, cautioned that upcoming legislation could alter the viability of some landlords’ operations: “The lettings sector is about to undergo one of the biggest evolutions in over 30 years. It’s crucial the Government encourages long-term investment in rental properties while treating tenants and landlords with equal fairness.”
As the housing market prepares for the challenges of 2025, landlords remain pivotal to balancing the scales of supply and demand. Whether through strategic investments in existing properties or adapting to legislative changes, the role of landlords will be instrumental in addressing the housing crunch. For now, the question remains: will the Government’s efforts to stabilise the market support landlords in their vital role, or will policy shifts add further strain to an already pressured system?
The ONS released private rent and house price data today: Private rent and house prices, UK: December 2024 – Office for National Statistics
