Rents soar to record high in February

Report reveals 10% year-on-year increase

Rents soar to record high in February

At an average of £1,230 per month for a newly let home, rents across the UK hit another record high in February, residential estate agent Hamptons has reported.

Its latest monthly lettings index revealed a 10% year-on-year increase, marking the second strongest annual growth since the company began recording this data.

London, where average monthly rent rose by 13.8% to £2,161, regained its place at the top of the rental growth charts. Hamptons noted an evenly matched rental growth across both Inner and Outer London, a reversal of last year when Inner London rents were recovering from their post-pandemic lows.


In a reversal of last year, smaller homes are seeing the strongest rent rises. The average one-bed rent increased 13% year-on-year in February, nearly triple the 4.5% rate recorded in February 2022. Rental growth for a three-bed home has decelerated from 10.6% in February 2022 to 8.7% in February 2023.

“Rental growth accelerated last month, marking the second strongest rate of growth recorded since our lettings index began,” Aneisha Beveridge, head of research at Hamptons, stated in an article discussing the monthly lettings report. “The annual increase will cost the average tenant who moves into a new home in Great Britain an additional £1,344 each year.

“While the number of rental homes coming onto the market rose for the fifth consecutive month, unlike in the sales market, demand from new renters remains up year-on-year too.”

One in six BTL purchases is mortgage free

The Hamptons report also showed that high mortgage rates have led to the majority of new buy-to-let purchases being funded by cash rather than a mortgage. So far this year, 59% of buy-to-let purchases were mortgage free, the highest share in six years and up from 53% in 2022.

The biggest shift has come in the southern areas of the country, where yields tend to be lower. A record 61% of investor purchases in the four southern regions of London, South East, South West, and East of England were made in cash, up from a low of 47% in 2022. In contrast in the north of England, cash purchases have fallen year-on-year, from 62% in 2022 to 60% in 2023.


Hamptons said that cash had become more popular in the lowest-yielding areas of the country, to avoid failing lender’s stress tests and to maintain landlord’s margins. It also estimated that the shift towards cash ownership would save new landlords across the UK around £61.9 million in mortgage interest payments this year, based on the average mortgaged investor paying £187,110 for their buy-to-let and putting down a 25% deposit.

“Against a backdrop of higher mortgage rates, investors are adapting,” Beveridge said. “So far this year, 12.1% of homes sold in Great Britain were purchased by a buy-to-let landlord, the same level as in 2022. While existing investors are paying down debt, new investors, particularly those wanting to buy in the lowest yielding parts of the country, are choosing cash to ensure the sums stack up.  Overall, this is set to shrink the total mortgage bill for buy-to-let in 2023.

“The recent rise in cash purchases brings a close to landlords’ ability to access competitive mortgage deals. Sub-2% mortgage rates – available over the last few years – meant landlords who were able to buy homes outright chose instead to make the most of record low rates. 

“Many investors spread their cash as far as it could go by topping it up with low borrowing costs to maximise their returns. However, today, investors are having to dig deeper into their savings to ensure the sums stack up on any new buy-to-lets.” 

Any thoughts on the findings of the latest Hamptons Lettings Index? Tell us by leaving a comment in the discussion box at the bottom of the page.