Rent disparity between northern and southern regions of England reportedly at a historical low, as per a letting agency's findings
Narrowing Rent Gap Between North and South England
The rental market in England has seen a significant shift over the past year, with the gap between rents in the north and south of the country narrowing substantially. This trend is influenced by several key factors, as outlined below.
According to the Office for National Statistics (ONS), house price growth in the North East has been faster than in the South West, with prices rising by 6.4% in the North East compared to only 0.9% in the South West over the past year. This upward pressure on rents in the north due to rising property values has helped close the rent difference with the south.
The UK labour market has also experienced some changes, with payroll employees declining and unemployment predicted to reach around 5% by late 2026. This softer labour demand and cooling wage growth, from 5.0% earnings growth in May expected to slow to 3% next year, have reduced upward pressure on rents overall. However, lower mortgage rates have eased landlord costs more pronouncedly in regions with historically higher costs (south), contributing indirectly to a balancing effect.
The rental market has also seen a supply-demand rebalancing, with 8% more rental homes available in the first half of 2025 compared to 2024. This increased availability has tempered rent growth, with a relatively greater impact on the traditionally more expensive south than the north where rents have been rising faster.
The exit of some domestic landlords has been partly offset by large corporate landlords and foreign equity investors, often investing in newer build-to-rent schemes. While this does not fully replace lost stock, it may stabilize rents especially in urban centers in the south, reducing regional disparities.
Rents have generally cooled or grown more slowly over the past year, driven by weakening tenant demand, higher availability of rental properties, and subdued wage growth. Specific regional rent growth data is limited, but house price rises strongly suggest that northern regions like the North East have experienced more rent increases, linked to a 6.4% house price rise, than southern regions like the South West, which have seen only a 0.9% house price rise.
In summary, the narrowing rent gap is a combined result of faster property price increases and rent pressures in northern areas, slower growth and easing landlord cost pressures in the south, and evolving market dynamics with supply adjustments and corporate investment. Rents have generally grown but at a slowing pace, with regional differences converging partly due to these factors.
As of August 2023, the average rent in the north of England was £960 per calendar month (pcm), compared to £1,318 pcm in the south. This represents a current price gap of 37%, which is the smallest difference since Hamptons began its index in 2013. The government's Renters' Rights Bill, which aims to ban no-fault evictions, has been placed before Parliament, which could further stabilize rental prices in the future.
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