Monthly rents across the UK have climbed to record highs once again, despite an increase in the number of rental homes coming onto the market, according to new data from property search site Rightmove.
Outside London, the average advertised rent rose by 0.6 per cent over the past three months to £1,349 per calendar month, setting a fresh record. In the capital, where the rental market remains the most expensive in the country, the average monthly rent nudged up by 0.1 per cent to reach £2,698 — another new high.
Compared to pre-pandemic levels, renters outside London are now paying 43 per cent more each month. In London, rental inflation has been somewhat slower, with average rents rising by 28 per cent over the past five years. By contrast, average earnings across the UK have grown by around 31 per cent over the same period.
The surge in rents is rooted in a post-pandemic supply shortage, with letting agents previously reporting queues of prospective tenants for a limited number of properties. Although there are now signs of the market easing, the imbalance remains acute. Rightmove estimates there are still an average of 12 tenants competing for every rental property — twice as many as before the pandemic, but down from 16 applicants per property a year ago.
This marginal improvement has been driven by an 18 per cent increase in rental listings compared to the same period last year, coupled with a 7 per cent fall in the number of prospective tenants. However, regional disparities remain: the North West of England continues to experience particularly fierce competition, whereas conditions in London are somewhat less intense.
The recent rise in rental supply has been partly attributed to falling mortgage rates, which, combined with surging rents, have made buy-to-let investments more attractive once again.
“The rental market is still really busy and, as the regional picture shows, it’s likely to feel even busier in some areas of Great Britain than others,” said Colleen Babcock, head of trade marketing at Rightmove. “It’s good news for tenants that, on the whole, the balance between supply and demand is improving. This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.”
Nonetheless, the overall rental landscape remains much tougher for tenants than before the pandemic. There are still a third fewer rental properties available compared to five years ago, while demand from renters has risen by 10 per cent over the same timeframe — keeping upward pressure firmly on prices.
