In a positive turn of events for UK property investors, the average advertised rent for homes across Britain, excluding London, has reached a record high of £1,280 per calendar month (pcm) in the fourth quarter of this year, according to Rightmove. This marks the 16th consecutive quarter of rising rents.
Outside of London, advertised rents have climbed 9.2% higher than last year, still a significant annual increase but the lowest since 2021. London, too, has experienced a new record in rents, reaching £2,631pcm. However, the quarterly rise is a modest £4 (0.2%), and the yearly increase has halved from 12% last quarter to 6%, marking the first time in single digits versus a year ago since 2021.
A key factor contributing to the deceleration in rent rises is the improved balance of supply and demand in the rental market. In 2024, the number of tenants enquiring about moving is 13% lower than the same period last year, while the supply of new rental properties has increased by 7%. Although the market remains busy compared to pre-pandemic levels, these indicators suggest a more favorable experience for tenants seeking rental properties in 2024.
There are also positive signs that more tenants are finding affordability in the rental market. Approximately 23% of rental properties now see a reduction in advertised rent by landlords, up from 16% last year. This shift suggests that landlords are becoming more responsive to market dynamics, making rental properties more accessible to a broader range of tenants.
Tim Bannister, from Rightmove, noted, "The trend of rent growth gradually slowing continues, with an improvement in the supply and demand of rental properties having a big contribution to that. We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up, and 2024 is the year we think there will be a much smaller increase in advertised rents of 5% outside of London, and 3% in the capital.”
Christian Balshen, Rightmove’s lettings commentator, added, “We hope this trend of a better balance between supply and demand continues this year, but the reality is letting agents are still extremely busy compared to what we used to consider ‘normal.’ We’re seeing more evidence that many tenants are reaching the point where they can’t afford to pay any more in rent, which is leading to reductions in advertised rental prices and means some properties are staying on the market for longer. The average time to find a tenant has ticked up from 19 days at this time last year, to 22 days now. To reduce the risk of void periods, landlords will need to work closely with a local letting agent this year, who will have access to the latest market insights to back up their years of expertise.”