Rent rises slow to a trickle - new figures for London and beyond

The average advertised rent for new properties coming to market hits another new record outside of London of £1,280 per calendar month, says Rightmove.

Despite a 16^th consecutive record in newly advertised rental prices, this quarter’s rise of just £2 is the smallest since at this time in 2019 before the pandemic.

Advertised rents outside of London are now 9.2 per cent higher than last year, which whilst still a significant annual increase, is the lowest rents have been compared to a year ago since 2021.

It’s the same story in the capital, with rents in London reaching a new record of £2,631. However, this is just £4 higher than the previous quarter, as the yearly increase of rents in London halves from 12 per cent last quarter, to six per cent now. This is the first time London rent rises have been in single digits versus a year ago since 2021.

The early signs indicate that the annual pace of rent growth will slow further in 2024, and Rightmove predicts rents to be five per cent higher outside of London by the end of 2024, and three per cent in London.

One of the main contributors to the slowing of rent rises, and the anticipation of a further slowdown in 2024, is an improvement in the balance of supply and demand in the rental market. The trend of supply improving and tenant demand easing has continued at the start of 2024.

The number of tenants sending enquiries to letting agents to move is 13 per cent lower than the same period last year. At the same time, the number of new rental properties coming onto the market is seven per cent higher than last year.

Rightmove suggests that to put this into perspective, the average number of enquiries agents are receiving for every available rental property is currently 11, which while still nearly triple the four at this time in 2019, is down from 14 in 2019.

The market is still very busy compared to pre-pandemic levels. However, these early signs suggest a better experience for many tenants trying to secure a rental property in 2024.

There are also signs that more tenants are beginning to hit an affordability ceiling, further contributing to slowing rent rises.

Nearly a quarter of rental properties now see a reduction in advertised rent by the landlord, markedly up from the 16 per cent at this time last year, suggesting the initial advertised rental price in some areas is increasingly out of reach for some tenants.