Average rents fall for the first time since 2019, Rightmove finds

Average rents fall for the first time since 2019, Rightmove finds



The average advertised rents of properties coming to market outside of London declined 0.2% in Q4 of last year to £1,431 per month, data from a property listing site found.

According to the Rightmove Rental Tracker, although average rents were still 4.7% higher than the same period a year before, this was the first quarterly decrease recorded since 2019. 

This was also a slowdown in rental growth, as rents rose by 2.3% quarterly in Q3 to an average of £1,344, which was also a 5.2% annual uptick. Rightmove said the growth seen in Q4 was the slowest since 2021. 

In London, average advertised rents rose for the 13th quarter in a row to a record £2,695 per month. However, the growth rate was nominal at 0.1% or £1 more since the previous quarter, which was also lower than the 1.2% quarterly rise in Q3.  

Annually, rents in London were 2.4% higher, similar to the 2.5% growth rate seen in Q3. Again, this was the lowest rate of growth since 2021. 

 


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More rental supply 

Rightmove found that, amid this slowdown in rental growth, there were 13% more properties on the market than the previous year. 

Anecdotally, agents said tenants were choosing to stay in rental homes due to costs and, while there were signs of landlords exiting the market, larger investors’ interest continued.  

Additionally, the supply and demand imbalance appeared to ease, as the number of prospective tenants fell by 16% year-on-year. 

Rightmove said some of the rental demand might have moved to the purchase market, as lower rates and higher wages gave first-time buyers a boost. 

Otherwise, there were around 10 applications per property on average, double the pre-pandemic average, which Rightmove said indicated the market was still busy by historical standards. 

The number of new rental properties coming to market was also stable on last year, with no signs of either an influx of properties or exodus of landlords. 

Some 15% of homes currently for sale on Rightmove were previously for rent in 2024, compared to 13% the year before. This was most notable in London, where 24% of homes up for sale were previously rental properties, up from 20% in 2023. 

Colleen Babcock, property expert at Rightmove, said: “A first quarterly drop in rents is the culmination of several months of improvement in the balance between supply and demand.  

“While new tenants are still paying more than they were at this time last year, the pace of growth continues to slow. However, though this is the big picture of market activity, agents on the ground still tell us that the market is very hot, and some areas have improved more than others when it comes to the supply and demand balance. Our own data shows that the average rental property is still receiving 10 applications per property, which is lower than the peak, but still double the pre-pandemic norm.” 

 

A cooler but busy rental market 

John Baybut, managing director at Berkeley Shaw Real Estate in Liverpool, said there had been a “levelling-off” in tenant demand, but the market was still busier than before the pandemic. 

He said: “Tenants are paying very high rents, so with more supply on the market now, some are being more ‘choosey’. Some have also decided the costs of moving are too expensive and have decided to stay put. Landlords have to be careful to price accurately right now, despite having their own affordability pressures with high mortgage rates.  

“Landlords need to work closely with experts to set the right price and keep their home occupied in the current market, reducing the risk of void periods.”

Alex Bloxham, partner and head of residential lettings at Bidwells, also said the market was “cooling” after tenants had “endured intense competition and consistent rental inflation”.  

He said: “These figures suggest landlords are continuing to invest in their buy-to-let portfolios while more tenants are choosing to stay put, likely due to continued macroeconomic uncertainty and the upfront costs involved in relocating.  

“The high rate environment and regulatory changes have had a dampening effect on supply, with fewer new landlords entering the housing market. All the while, demand-side drivers including expensive for-sale housing, high mortgage rates, and re-urbanisation have remained prominent demand-side drivers for rental housing, with these dynamics combining to produce a stark supply-demand imbalance.” 

“This mismatch will continue to be a defining feature in the market, but the steady improvement we’re seeing will put downward pressure on rents and represents positive news for renters,” Bloxham added. 





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