The HomeLet Rental Index, which is released monthly and analyses archived rents to paint a picture of the UK market, is ending the year with the news that London’s tenants are now paying out hundreds more pounds a month compared to this time last year as prices increase by 8.11%.

The latest data also shows that, across the country, average monthly rent is up just under 9% (8.85%) compared to the end of 2022. In a shocking reveal, average UK tenants can now expect to pay £1279pcm for their homes, a staggering £221 more every month than what the post-Covid rental market offered in December 2021.

As rising prices fail to match wage increases for many, London’s tenants can now expect to cough up 39.3% of their wages for rent, which is a massive 13.6% increase compared to last year. Despite the support announced for tenants by Prime Minister Rishi Sunak in the autumn budget, HomeLet’s figures give a stark view into the actual reality of the cost of living crisis in the UK.

On a more positive note, monthly rent in the capital has actually decreased by -0.8% and tenants are now paying, on average, £2,174pcm.

Commenting on the latest data, Andy Halstead, HomeLet & Let Alliance Chief Executive Officer, said: “This month, our Rental Index has given a glimmer of hope for London as monthly rental prices drop by -0.8% to £2,174pcm. Previously, figures have been steadily rising every time we scrape our data, so it was a welcome surprise to see a negative variance this time around.

“Unfortunately, though, the general picture remains bleak. Rent prices across the UK have increased by nearly 10% across the country in a year, and are up more than 20% in two years. Though the autumn budget announced more support for tenants, especially those in low-income households, our maths suggests it will not be nearly enough to cover rising rental costs and the money being forked out for bills and food – which have also gone up.

“Rental prices have increased by 8.11% in London in a year alone, and by 24.6% since 2021. I hope that the monthly decrease in the capital, though, is a sign of more positive movement in the market on the horizon. Spiralling costs are beneficial for neither landlord nor tenant; and we strive to support both at HomeLet.

“Especially for landlords with mortgages, the outlook is bleak for some time to come. The worst outcome possible for landlords is tenants failing to pay rent, everyone loses. There has never been a more important time for landlords to protect their rental income.”

The full breakdown of rent increases, variances and rent-to-income ratios can be found on the HomeLet website. The HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK. The trends reported within the HomeLet Rental Index are from data on actual achieved rental values for just-agreed tenancies arranged in the most recent period – providing an in-depth insight into the lettings market and what’s happening right now across the UK.