Record rents for tenants outside London – Rightmove

High demand and a lack of available properties are pushing rents outside London to record levels, according to Rightmove.

It estimates that 120,000 more rental properties are needed to achieve sustainable levels of rent growth.

The property website says the average advertised rent has reached a new peak of £1,316 per month – a 7% increase compared to last year.

The average London rent is now £2,652.

While the pace of rent growth has slowed from its peak of 12% two years ago, it remains much higher than the pre-pandemic norm of around 2% per year.

Imbalance between supply and demand

The platform’s property expert, Tim Bannister, said: “We’ve been talking about the imbalance between supply and demand in the rental market for a long time now, so it’s easy to forget that there was a time before the pandemic where rent price growth was more stable.

“Double-digit yearly rent increases were not sustainable and whilst there has been some improvement in the ratio between supply and demand, price growth at +7% suggests we are still out of balance.”

He adds: “In fact, our analysis shows we would need 120,000 more properties on the rental market to achieve a more sustainable level of rent growth of around 2% per year.

“The next government should be prioritising an improvement to the planning process, an acceleration of housebuilding, and encouraging more supply into the rental market.”

Key driver of rising rents

The imbalance between supply and demand is a key driver of rising rents which sees Scotland being the hardest hit, while London has seen some improvement.

A fall in the number of tenants looking to move in London, combined with an increase in available properties, has led to a slowdown in rent price growth in the capital.

From a peak of 18% in 2022, London rents are now growing at just 4%, the slowest rate in the country.

Private rental sector needs more houses

Propertymark’s chief executive, Nathan Emerson, said: “Propertymark has long argued that the private rental sector needs more houses to stabilise rental prices, but there is a myriad of other factors that can contribute towards making the market more attractive for both investors and tenants.

“With a general election coming this week, Propertymark would like to see the next government reform the tax system so that more investors can be persuaded to invest in the private rental sector and lower rents for tenants in the long-term.”

He added: “Whilst we support a greater supply of houses, there has to be a sensible deliverable programme mindful of protecting the green belt wherever possible.

“It would also be wise for them to avoid rent controls which have had a devastating effect on the private rental sector in Scotland.”

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