Advertised rents break £1,400 barrier – Rightmove

Tenants outside London have seen advertised rents pass £1,400 a month for the first time, while in the capital they are a record £2,825.

Rightmove’s latest figures put the average asking rent at £1,418, up 1.5% over the quarter.

Annual growth, however, stands at 2.4%, compared with increases of around 10% between 2021 and 2023.

The number of homes available to let nationally is down 2% on a year ago, with tenant demand falling by the same proportion.

Rents reach new record

The platform’s property expert, Colleen Babcock, said: “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.”

She added: “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.”

London homes to let

In London, the average advertised rent has also reached a record, at £2,825 a month.

Annual growth has accelerated to 3.2%, putting the capital third among Britain’s regions, although rents are mostly rising faster in cheaper areas.

The total number of homes available to let in London has fallen 9% over the year, while new listings are down 7%.

Tenant demand, meanwhile, has risen 6%, which Rightmove suggests may partly reflect employment opportunities and requirements to attend a London office.

Landlord investment and borrowing

Homes previously offered to tenants account for around 13% of properties for sale, a proportion that has remained broadly unchanged this year.

Also, it is only slightly above last year’s 12%.

The share of homes to let that were previously for sale has fallen from 17% to 15%, which Rightmove describes as an indicator of reduced landlord investment.

The average two-year fixed buy to let mortgage rate is now 5.34%, compared with 4.16% before the war in Iran began.

Rightmove’s mortgage expert, Matt Smith, said some landlords were still coming to the end of much cheaper fixed-rate deals, with higher refinancing costs potentially influencing whether they remortgage or sell.

Rental housing costs

The president of ARLA Propertymark, Kim Lidbury, said: “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.”

She added: “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.”