Rents for newly-advertised properties have hit all-time highs both for homes in London and the wider UK housing market, Rightmove has reported.

The portal says tenants beginning new tenancies in the capital are now paying £2,712 a month for each property, and £1,365 outside London.

But while it says rent rises are slowing, rents remain £400 higher than before the pandemic on average, and that an ongoing lack of properties to rent means house-hunting tenants across the UK will continue to face higher and higher rents in the short term.

Nevertheless, there are 15% more homes to rent than a year ago and demand for rental property is also softening as more first-time buyers emerge following recent reductions in mortgage lending rules.

Also, the average number of enquiries per typical rental property is now 11, with tenants competing with fewer other tenants for each property available as supply increases.

“Despite another new record in average asking rents for tenants, the big picture is that yearly rent increases continue to slow, which is good news for tenants,” says Rightmove’s Head of Partner Marketing, Colleen Babcock.

“Supply and demand is slowly rebalancing towards more normal levels, though we still have a way to go before we reach pre-2020 levels of available homes for tenants.

“The good news is that the latest industry snapshot suggests more investors are taking out buy-to-let loans compared with last year, which should help to bring even more homes to the rental market.”

Grappling with costs

But letting agents are less forgiving in their analysis. Megan Eighteen, President of ARLA Propertymark, says: “Many landlords within the private rental market are grappling with substantial hikes in their overall costs, including increased taxes, unfavourable mortgage rates, and ongoing regulatory challenges.

“These factors are making property investment less appealing and potentially riskier.

“Consequently, this is exacerbating the disparity between supply and demand for housing, and we’ve seen a significant impact on rental prices, which vary regionally.

“It is clear to see that many landlords may now be struggling to justify their current or future property investments, especially if costs and the number of regulations continue to rise.

“It is crucial for all governments across the UK to recognise the vital role the private rented sector plays in accommodating the nation’s housing needs and provide urgent support to enhance the supply of homes while effectively lowering rent levels in the long term.”