Average rents both outside and including London rose to a new high in Q4 last year, data from a property portal firm showed.
The Rightmove Rental Trends Tracker found that average advertised rents rose to a record £1,280 per month outside of London. Despite this peak, the quarterly growth was recorded at just 0.2%, which was the slowest pace of growth since 2019.
Rightmove said this was down to tightened tenant affordability resulting in 23% of rental homes getting a reduction in rent, compared to 16% last year.
In London, advertised rents jumped to a high of £2,631 per month which was also a 0.2% quarterly increase.
Rightmove said this pointed to a slowing down in rental rises and predicted an increase of 5% outside of London in 2024 and 3% in London.
Annually, advertised rents outside of London rose by 9.2% in Q4, the lowest yearly growth since 2021. In London, there was a 6.1% yearly rise.
Rightmove’s director of property science, Tim Bannister, said: “The trend of rent growth gradually slowing continues, with an improvement in the supply and demand of rental properties having a big contribution to that.
“We can’t keep seeing double digit rent rises every year as tenant affordability simply cannot keep up, and 2024 is the year we think there will be a much smaller increase in advertised rents of 5% outside of London, and 3% in the capital.”
Rents slowing ‘benefit tenants looking to move’
Rightmove said there had been a 7% annual rise in rental properties coming to market while tenant demand was starting to fall back.
At the start of this year, there was a 13% annual drop in tenants sending enquiries to letting agents and the number of enquiries per property came to 11. This was higher than the four average enquiries at the start of 2019, but lower than the average of 14 last year.
Hayley Brinn, director at The Total Letting Service, said: “The market is still really busy, and the high number of applicants per property is being exacerbated by some landlords leaving the market. Prices appear to be levelling out now as more choice becomes available, with tenants becoming more price sensitive, or just reaching the maximum of what they can afford to pay.
“The prices of larger properties in particular are slowing down, unless the landlord accepts an offer. Some tenants are reluctant to move unless they have no choice, due to the risk of being charged higher rents elsewhere, while other tenants who may want to move are stuck due to their current rent being below market value, and the price gap to move to a larger house is out of their reach. Rent prices slowing this year would benefit these tenants wanting to move.”
