The average advertised rent of new properties coming onto the market outside of London has risen by 1.5% this quarter (+£20) to a new record of £1,385 per calendar month (pcm).

This is according to Rightmove which says it’s the third consecutive quarterly record in advertised rents this year, and average advertised rents are now 3.1% higher than a year ago, the lowest this annual figure has been since Q3 2020.

Average advertised rents in London also rise by 0.9% this quarter (+£24) to a new record of £2,736. However, rents in the capital are now only 1.6% higher than a year ago, a figure last lower in Q2 2020.

The number of homes available to rent is now 9% higher than last year. The rising availability of rental properties has contributed to yearly rent rises both nationally and in the capital steadying to more normal levels.

While the number of available homes to rent is still 23% below this time in 2019, it’s the closest the market has been to pre-pandemic levels of available supply for four years.

However, the pace at which fresh rental properties are coming onto the market has slowed in recent months and now stands at just 1% ahead of this time last year. Meanwhile, tenant demand continues to cool and is 14% lower than at this time last year.

An increase to stamp duty for rental home purchases from October last year and the recent rumours about a national insurance tax for landlords in the upcoming Autumn Budget are likely to be impacting landlords considering investing. Additionally, the forthcoming Renters’ Rights Bill is creating uncertainty.

In a recent survey amongst landlords, one in three landlords said they were considering exiting the market at some point in the future, with two-thirds (66%) feeling unsupported by the government. Moreover, less than half (43%) said they were fully aware of the Renters’ Rights Bill and prepared for the changes.

Affordability remains very stretched for tenants looking to rent a home, as well as landlords looking to invest in their portfolio and provide tenants with more homes to choose from.

Despite average earnings rising by 5% compared with last year, outpacing rent rises, the cost of renting still takes up 44% of the average wage, up from 40% five years ago.

Additionally, for renters also looking to save up for their first home whilst contending with record rents, a 20% deposit for a typical first home has risen by just over £5,000 over the last five years, from £40,326 to £45,374.

For landlords looking to expand their portfolio, the latest average interest rate on new buy-to-let mortgages stands at 4.87% according to UK Finance. Whilst this is down from last year’s 5.21%, it is significantly higher than the 2.93% seen before the mini-Budget in 2022.

In Rightmove’s survey amongst landlords, nearly a third (29%) said that rising mortgage rates were affecting their plans to expand their property portfolio. Nearly one in five (17%) said that high mortgage rates meant they were considering reducing the size of their portfolio.

Rightmove’s property expert Colleen Babcock says: “The majority of landlords are looking to stay in market and even grow their portfolios which is positive for tenants, but there are clearly challenges for those looking to invest in rental property. Sustained high mortgage costs mean landlords need to make sure purchases are viable, and uncertainty around legislation like the Renters’ Rights Bill and what may or may not be in the upcoming Autumn Budget isn’t helpful when looking to make financial investments. 

“Landlords who were considering selling up over the next year told us that legislation changes were their biggest source of frustration. The government needs to consider this when setting its policy agenda over the next twelve months, otherwise we may see more landlords choose to leave the sector which will be to the detriment of tenants.”