Easing earnings growth points to slower rental growth

• There is a very strong relationship between earnings growth and rental growth. Over the long-term the two move very much in tandem.

• Latest earnings data released this week showed a lower growth rate (annual average growth of 4.4%). The first time earnings growth has been at this level since the end of 2020.

• Different rent series show different things, this series includes renewals and therefore will always be slower to show rental changes than open market lets only.

• The direction of travel is clear, rent rises for those renewing as well as those on new leases will continue to moderate in line with lower earnings growth. Source: Dataloft by PriceHubble, ONS, HM Treasury Consensus Forecasts