Average advertised rents hit a record high in Q3, data from a property listing firm found.
The Rental Trends Tracker from Rightmove showed average rents outside London rose to £1,344 per month, a 5.2% surge on the year before. While this was the 19th consecutive quarterly record reported by the firm, it said this was the slowest rate of growth since 2021 and lower than the increase of 6.8% in Q2.
Rents in London also reached a new high of £2,694 per month, a 2.5% rise on last year.
Rightmove said the direction of growth was in line with its end-of-year prediction for advertised rents, which it forecast to be 5% higher for properties outside of London and 3% up in London.
Excluding London, landlord yields across Great Britain came to 6.4% in Q3, which was 0.4% up on the year before.
Tim Bannister, director of property science at Rightmove, said: “While we’re seeing some signs of improvement in the market’s chronic levels of demand and supply imbalance, helped by a slight increase in the number of available rental properties, affordability remains a key challenge for renters as prices continue to hit new records.
Market Moves: Understanding UK Housing Trends
Introducing the first in our video series “Market Moves: Understanding UK Housing Trends” The
Sponsored by Halifax Intermediaries
“Tenant competition has eased slightly from last year, but the market is still far from balanced.”
Improvement in supply imbalance
Rightmove said that while local letting agents continued to be “very busy”, with high numbers of tenants wanting to move, the balance between supply and demand had improved on last year.
The average number of tenant enquiries for each available rental property fell from 23 to 15 year-on-year. However, this was still nearly double the 2019 pre-pandemic average of eight.
Furthermore, there were 13% more rental properties on the market compared to last year, but this was still 27% down on 2019.
Additionally, 21% of rental properties saw a reduction in their initial advertised rental price before finding a tenant. This compares to a share of 16% last year and was the highest figure for Q3 since 2020.
The firm’s data also suggested some landlords were getting ready for any tax or regulation changes such as a potential capital gains tax (CGT) increase or requirements to improve the Energy Performance Certificate (EPC) rating of rental homes. According to Rightmove, a record share (18%) of homes up for sale were formerly rental properties.
Bannister added: “We are seeing some landlords choosing to exit the market with potential tax changes and stricter EPC regulations as additional factors in landlords’ decision-making.
“With rental supply under strain, incentivising landlords to invest in energy-efficient upgrades or offering tax relief could help maintain rental supply and, ultimately, ease affordability pressures for tenants.”
