Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Rent rises slowed again in October, so the average is up 5.0 per cent in a year.
“This is good news for hard-pressed tenants, because it’s a long way from the peaks of 9 per cent we saw in 2024, but the impact of such a long period of runaway rents is still taking a toll, with average monthly rents hitting £1,360.
“In London, life is especially tough, because average monthly rents will set you back an eye-watering £2,265. As landlords continue to sell up, we can expect the pressure to remain on renters.
“The HL Savings and Resilience Barometer shows renters are already struggling.
“They have an average of just £39 left at the end of the month. This not only makes it much harder for them to save and invest for the future, it also leaves them with very few options if their landlord hikes the rent again.
“Annual house price rises fell again to 2.6 per cent – so they’re growing more slowly than inflation.
“This varies significantly across the country. In the South East and South West, prices are growing at less than 1 per cent, and in London they’re actually falling.
“This is difficult news for homeowners, especially those who plan to downsize and cash in on as much property equity as possible.
“However, it’s a real positive for first time buyers. If they have a competitive savings account, it will be outstripping house price inflation, making it easier for them to build a deposit.
“Of course, if they have an average account, they’ll only be making 2.51 per cent and if they’re with a high street giant, they’ll be making even less, so they’ll have to work overtime to keep up.
“It’s why it’s vital for those getting close to being able to buy to check online banks and savings platforms for the best rates.
“For those with a longer time period, it opens up the possibility of using a Lifetime ISA, where the 25 per cent bonus from the government will keep your deposit growing streets again of house prices.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.