Asking rents hit record high as supply slips

The average advertised rent of homes outside London has risen to a new record of £1,418 per calendar month, Rightmove data shows.

Figures from the portal highlight that asking rent prices have increased by 1.5% this quarter.

But despite a new record rent, annual rental growth has returned to a more stable level of 2.4%.

Average rents have reached another new record.”

The number of available rental homes nationally is 2% lower than a year ago, while renter demand is also down by 2%.

London has also reached a new average advertised rent of £2,825 per calendar month, with annual rent growth accelerating to 3.2%, above the national average outside of the capital.

There’s a larger squeeze in London though, Rightmove said, with the total number of available rental listings down 9% annually, newly listed rental homes down 7%, and renter demand up 6% compared with a year ago.

Rising rents

Rents are mostly rising faster in lower priced parts of Britain, but London is the third fastest region for rental growth annually.

The research also shows that the proportion of homes for sale that were previously for rent, an indicator of landlords selling up, is stable this year at around 13% and only slightly up on last year, at 12%.

However, the proportion of homes to rent that were previously for sale has decreased from 17% to 15%, an indicator of reduced landlord investment

Colleen Babcock (pictured), property expert at Rightmove, says: “Average rents have reached another new record and have now surpassed £1,400 per month outside London for the first time. However, beneath the headline figure, rental growth has continued to settle compared with the exceptionally fast pace we saw a few years ago.

“Supply remains constrained, which is continuing to put upward pressure on rents, but demand is also more measured. That has helped to create a more balanced market overall, even though affordability remains a challenge for many renters.”

Kim Lidbury, President of ARLA Propertymark, says: “The latest figures highlight why the rental market needs to be judged on more than the rate at which rents are rising. Although rental growth has moderated, advertised rents remain at record levels, and the availability of suitable homes continues to be a major concern for tenants.

“The cost and complexity of providing rental housing remain important considerations for landlords. Financing costs, taxation and regulatory requirements all influence decisions about whether to invest in, retain or sell rental property. These pressures can have wider implications for the availability and choice of homes for tenants.

“Letting agents also have an important role in helping landlords meet their responsibilities, maintain property standards and provide a professional service to tenants. A well-functioning private rented sector depends on responsible landlords being able to operate sustainably, alongside effective protections for renters.

“Ultimately, the priority is to ensure there are enough good-quality homes available to rent, at a range of price points, while maintaining a rental sector that works for both landlords and tenants. A slowdown in rental growth is welcome, but it will not, on its own, resolve the affordability challenges facing renters.”