Rents fell sharply across much of Britain in January signalling a pronounced seasonal slowdown in the private rented sector but affordability pressures remain stubbornly high despite the monthly easing.
Latest data from Propertymark shows month-on-month rental declines in the majority of regions, with some of the steepest drops recorded in the North East (down%), the South West (down 8.1%), Yorkshire and Humberside (down 7.4%) and Wales (down 6.1%) between December and January.
The pullback follows the traditional post-Christmas lull in tenant demand. Yet the income required to secure a typical rental property has shifted only marginally over the past year, underlining the structural strain facing tenants even as headline rents soften.
London was the clear outlier. Average rents in the capital rose 3.7% month on month to £2,204 in January, from £2,125 in December.
SALARY SACRIFICE
However, the representative salary required to secure an average-priced rental in London edged down slightly year on year to £66,120, from £66,510.
Across the country, the figures reveal a fragmented market in which national averages obscure sharp regional divergences.
In the North East, average rents dropped from £993 in December to £894 in January, a near 10% fall. The typical salary required to rent there also fell year on year, from £27,480 to £26,820, a 2.4% reduction.
Wales saw average rents fall sharply month on month.
By contrast, Wales saw average rents fall sharply month on month to £1,037 but the salary needed to secure a home rose 3.5% year on year to £31,110. Northern Ireland recorded a 3.4% monthly rent decline to £913, while the income threshold rose 3.3% over the year to £27,390.
In the South East, rents slipped 2.9% month on month to £1,491, with the required salary easing marginally to £44,730. The South West experienced one of the largest monthly corrections, with rents down from £1,483 to £1,363, although the typical salary required remains high at £40,890.
The East of England posted a modest monthly rent increase of 0.15% to £1,324, while Scotland saw a slight rise to £1,042. In most other English regions – including the East Midlands, West Midlands and North West – rents fell between 3- and 5% over the month.
DEMAND DYNAMICS
Megan Eighteen (main picture, inset), President of ARLA Propertymark, says: “January’s data points to a rental market that is clearly responding to seasonal demand dynamics, with widespread month-on-month rent reductions signalling increased price sensitivity among tenants and a softening of competition in many regions. However, this short-term easing should be viewed in context.
“Despite notable monthly declines, the annual salary required to secure a rental property has remained broadly stable or increased in several areas, underlining that affordability pressures remain deeply embedded.
Structural issues, particularly constrained supply, continue to limit the extent to which falling rents can deliver sustained relief for renters.”
PAUSE RATHER THAN TURNING POINT
She adds: “As a result, January’s figures reflect a pause rather than a turning point. While renters in some regions may experience temporary breathing space, lasting improvements in affordability will depend on increased rental stock and more balanced supply-and-demand conditions, rather than seasonal fluctuations alone.”
Propertymark said the data, which track average agreed rents alongside the representative pre-tax salary required by referencing agencies, highlight the disconnect between short-term pricing movements and longer-term affordability constraints.
While some tenants may benefit from lower asking prices at the start of the year, the underlying mismatch between supply and demand continues to define the sector – leaving many renters facing high income thresholds even as rents dip in the depths of winter.
