Rental supply slows amid uncertainty over Renters’ Rights Bill

Uncertainty around the Autumn Budget and Renters’ Rights Bill sees a slowdown in the number of new rental properties coming onto the market, according to a new report.

Rightmove’s Rental Trends Tracker reveals that the pace at which fresh rental properties are listed has slowed in recent months, now standing just 1% ahead of this time last year.

Rightmove is urging the government to support landlords, as one in three say they are considering exiting the market at some point in the future, with two-thirds (66%) feeling unsupported by government policy.

Government legislation a big source of frustration for landlords

According to the data, while the number of homes available to rent is 9% higher than last year, overall supply remains 23% below 2019 levels, and the pace of new rental listings continues to be sluggish, just 1% ahead of this time last year.

The Rightmove survey also reveals nearly a third of landlords (29%) said that rising mortgage rates were affecting their plans to expand their property portfolio.

Nearly one in five (17%) said that high mortgage rates meant they were considering reducing the size of their portfolio.

Rightmove’s property expert Colleen Babcock says, despite the majority of landlords looking to stay in the market, there are challenges for those looking to invest, including government legislation.

She said: “The majority of landlords are looking to stay in market and even grow their portfolios which is positive for tenants, but there are clearly challenges for those looking to invest in rental property.

“Sustained high mortgage costs mean landlords need to make sure purchases are viable, and uncertainty around legislation like the Renters’ Rights Bill and what may or may not be in the upcoming Autumn Budget isn’t helpful when looking to make financial investments.

“Landlords who were considering selling up over the next year told us that legislation changes were their biggest source of frustration. The government needs to consider this when setting its policy agenda over the next twelve months, otherwise we may see more landlords choose to leave the sector which will be to the detriment of tenants.”

Rents continue to rise

The findings reveal that rents continue to rise across England, with average advertised rents in London reaching a new record of £2,736.

Outside of London, the average advertised rent for new properties has increased by 1.5% this quarter (+£20), reaching a new high of £1,385 per calendar month (pcm).

This marks the third consecutive quarterly record in advertised rents this year, with average rents now 3.1% higher than a year ago.

Despite average earnings rising by 5% compared with last year and outpacing rent increases, affordability remains stretched for renters, with the cost of renting still taking up 44% of the average wage, up from 40% five years ago.

Meanwhile, the deposit required for a typical first home has increased by £5,000 over the past five years, rising from £40,326 to £45,374.