January 2021 Lettings Index
Nationally the rate of rental growth picked up for the sixth month running. Across Great Britain rents rose 4.3% in January 2021, up from 4.1% in December. A shortage of stock outside city centres has seen landlords push rents to above what they were achieving pre-COVID. In January more than two-thirds of landlords letting a home in Great Britain achieved a higher rent than they had previously let it for, and by an average of £60 per month.
The South East topped the rental growth stakes, recording a 10.0% increase in rents over the last 12 months. This marked the first time a region outside London recorded double-digit rental growth since Hamptons records began in 2012.
This growth has been driven by falling numbers of rental homes on the market, with 14% fewer rental properties available to rent than in January 2020. With the exception of London, every region recorded double-digit falls in the number of rental homes on the market between January 2020 and January 2021.
Rental growth in London remained positive for the fourth straight month, rising 1.0% compared to January 2020. However, this growth masks an Inner-Outer divide with Inner London rents falling 15.9% year-on-year and Outer London rents rising 6.2%. This pandemic-induced divide means Inner London rents stand just 24% higher than Outer London rents, down from a differential of 100% in April 2013.
Given the average home in Inner London cost £2,213 per month in January, rents in London’s inner zones now cost 17% less than they did eight years ago in January 2013 when the index began. 
