The average advertised rent of new properties coming onto the market hits a 17th consecutive record, with the average price of rental properties outside of London now £1,291 per calendar month.
The data - from Rightmove - shows average rental prices are now 8.5% higher than a year ago, however the pace of rent growth continues to slow and drops for the second quarter in a row.
Average advertised rents in London have seen a more significant slowing in rental price growth. The average rent in London rises by just two pounds to a new record of £2,633 per calendar month.
This means that average rents in the capital are now 5.3% higher than last year, with rent growth steadily slowing since the peak of 16.1% in Q3 2022
Rightmove’s Director of Property Science Tim Bannister says: “The rental market is no longer at peak boiling point but it remains at a very hot simmer. Looking at data across the whole market, we can see some slow improvements for tenants with more choice, and competition with other tenants slowly starting to ease.
“However, tenants may not feel the benefit of some of these improvements in their local market, as the balance between supply and demand remains so far from pre-pandemic levels. The fact that even with some improvements to the level of supply, we are still nearly 50,000 properties behind the pre-pandemic market, is a stark reminder that the industry needs more good quality rental homes, and we need to encourage investment from landlords to provide them.”
Christian Balshen, Rightmove’s lettings spokesperson adds: “Whilst demand is gently easing and the supply of available properties is increasing, the market is still unable to fulfil the demand for rental properties, as it has been since the pandemic. It is clear that letting agents are still receiving a large number of enquiries for each property which they market. However just because there is very high demand doesn't mean that tenants can automatically afford higher rents.
“We are also seeing a slowdown in the rate at which rents are increasing, and a slight increase in the time it is taking to let properties in some areas. This may suggest that we are reaching a ceiling of rental affordability. In order to ensure that void periods are kept to a minimum, it is critical that landlords pay close attention to the time it is taking to let properties in their area and take into account both affordability and demand when setting rent levels."
Rightmove says there are still nearly 50,000 rental properties needed to head back to the pre-pandemic level of rental supply.
The latest market stats show that the number of rental properties available to tenants is 11% higher than at this time last year, though still 26% below 2019.
Similarly, the number of would-be tenants looking for a home to rent has eased by 17% compared to last year but is still 54% higher than pre-pandemic 2019.
The portal says letting agents are still unable to meet the level of demand from tenants and are now fielding an average of 13 enquiries per rental property. Whilst this is down from 19 at this time last year, it is still nearly triple the average of five back in March 2019.
Whilst average rents are continuing to grow, Rightmove claims there is evidence that tenant affordability is being severely tested, as reductions in rental prices are now at a five-year high for this time of year.
The proportion of rental properties that see a reduction in price now stands at 22%, up from 16% at this time last year, and the highest at this time of year since 2019 when it was 23%.
This suggests more landlords are having to reduce the advertised rent to meet the affordability of their local market.
The largest homes, top-of-the-ladder market sector, which includes four-bedroom detached houses and all five-bedroom properties and above, are the most likely to be reduced. A third (30%) of top-of-the-ladder properties currently see a reduction in price, a new record for this time of year dating back to 2012.
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I am shocked. Who could have foreseen this unintended consequence? Everyone with an ounce, I rarely do metric 😉, of common sense. 😂
So true, I am shocked to my core 😂😂💰💰
Very long Article about data again forgot to mention the main driver of high Rent.
So it’s not a factual Article at all you can’t ignore the causes of high rents.
No mention of Licensing Schemes costing billions, scrapping Section 21 stopping investment, Section 24 taxing your finance costs which is not profit, the unexpected jump in interest rates catching many unawares, all the quangos Organisations with Charitable Status mushrooming every day living off our backs, 3% surcharge SD on purchase also a deterrent on investment, 4% surcharge c/gains, reduced capital allowance, double c/tax on vacant, increased income tax etc, I didn’t see any of this taken into account in your data regarding rising rents perhaps you don’t count costs .
Funny because round my manor they’re actually decreasing and rather rapidly
Don’t believe the hype as the classic rap song goes ….
I think London ( 🏰), if you’re there, is different, I am in Manchester and they are going only one way 🚀
Classic? Surely “Show me the way to go home” is the classic.
It’s simple, either I get a sufficient return for the now constant aggravation of being a landlord or I sell up.
Agreed we have to make all the agro worth while
Indeed. Just like any other business. If you sell a product that no longer makes a profit, or is too much hassle to turn into a profit, then you stop selling that product and go and do something else with your capital. Now imagine a situation where the authorities "forced" you to keep on selling that product at a loss or with a load of hassle and made it impossible for you to get out.....
Ive been advised to invest in more properties if i sell
Id rather flush it down the loo
I imagine some landlords increasing their rents while they can - before a Labour government freezes rents. Our costs as mentioned above are rising and like any other business we have to put prices up. I am sure the corporate landlords will be allowed to charge what they like under any government.
I'm surprised average rents have only gone up 8.5% in the last year.
Any landlord coming off a mortgage fix will have seen mortgage payments go up by at least 80%. Some of mine increased by 115%. Other costs have also increased such as insurance (up around 22%), tradespeople (day rate up around 20%). Our own living costs have increased and most of us do actually earn our living by providing and maintaining homes for people who don't want to buy their own at this stage in their lives. At the very least we want the return to exceed what we would get from a high interest account. Being a landlord comes with significant risk and effort.
Obviously some tenants could buy their own house but the cost of new mortgages has gone up significantly more than 8.5% in the last year. I'm not convinced most tenants are wannabe homeowners. I house 51 adults and most years 2 of them will buy a house. There's a clear split in those who know they will never buy (due to age and income) and those who will one day when they have settled in a job somewhere they like, have met their life partner, mortgage rates are attractive, etc.
It also needs to be remembered LHA rates have just been increased by around 18% so this has presumably helped keep the rent rises a bit lower for self funding tenants if the average increase is only 8.5%. Or maybe the LHA impact doesn't show in the figures yet and there will be a spike when it does?
More unintended consequences of government medalling in a market they fail to understand.
Bruce, its meddling! Medaling is what Olympic athletes do!
They know exactly what they’re doing ….
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