The two years between July 2020 and July 2022 marked the largest erosion of tenants’ buying power over any period since the launch of the Hamptons lettings index in 2013, the firm stated in its latest report.

Strong rental growth has meant that tenants’ budgets don’t stretch as far as they used to.  This means that tenants are having to trade down and ‘lose a bedroom’ in order to spend the same amount of money on rent as they did in 2020, said Hamptons.

Between July 2020 and July 2022, average rents in Great Britain rose by 16.2% or £165 a month.  In July 2022, the average studio (£817pcm) cost the same as an average one-bed 27 months ago; the average one-bed (£929pcm) cost the equivalent of an average two-bed 24 months ago and finally the average two-bed (£1,068pcm) cost what the average three-bed cost 16 months ago. This typically means that what the average tenant is paying in rent today, would have bought them an extra bedroom two years ago.

Tenants in the Southwest have seen what they get for their money fall faster than anywhere else. Here, tenants saw their spending power eroded by the equivalent of a bedroom over just 16 months due to rents rising by 18.7% or £169pcm. Scotland followed over 17 months and the Northwest over 19 months.  At the other end of the scale, it took an average of 30 months for Welsh tenants to see their money shrink by the equivalent of a bedroom.

Prior to the last 24 months, it had taken six years (or 74 months) for average rents to rise by an amount equivalent to the cost of a bedroom, with the largest increases in Northern England. This means the rent tenants pay today will buy them an average of two fewer bedrooms than eight years ago.