- Average asking rent outside London hits record level of £1,280 a month
- Rightmove said the recent increase marks the 16th consecutive record for asking rents.
- Typical asking rents in the capital also hit a new record of £2,631.
Tenants are paying record amounts in rent and showing signs of hitting the “upper end of affordability”, according to new research.
This is where tenants are paying near the highest level of what they can afford to pay each month.
According to Rightmove, the average asking rent for new properties coming onto the market has reached a record £1,280 per month for properties outside the capital.
This is the 16th consecutive asking rent record, and tenants appear to be signaling that this level of increase is unaffordable.
Rightmove said 23% of rental properties listed on its website had reduced advertised rents, up from 16% at this time last year.
In more good news for tenants, the real estate website said rent growth is slowing.
In value terms, rent increases this quarter amounted to just £2 a month, or 0.2%, the smallest increase since this time in 2019.
Rightmove also said published rents outside London are currently 9.2% higher than last year.
While this isn't good news for those looking for a new rental property, it's worth noting that the annual increase rate is the lowest since 2021.
The situation in London was similar to that in other parts of the country, with rents in the capital hitting a new record of £2,631.
This is an increase of £4 (0.2%) a month compared to the previous quarter, after rent increases in London were halved from 12% last year to the current 6% level.
London's annual rental growth rate is in single digits for the first time since 2021.
Rightmove expects the annual rate of rental growth to slow further in 2024.
The report predicts rents will rise by 5% outside of London by the end of 2024, and 3% in London.
The company attributes much of this expected economic slowdown to a realignment of supply and demand in the rental market.
Letting agents agreed there are signs that there is more choice in the rental market.
Hayley Brin of Total Letting Services said: “Prices are now leveling out as tenants become more price-sensitive or hit a ceiling on what they can afford, with more options available. It seems like there is.”
“Unless landlords accept offers, prices are falling, especially for larger properties.
“While some tenants may be reluctant to move unless they have no other choice due to the risk of being charged higher rents elsewhere, others who may want to move may be reluctant to move if their current rent is It's below market value and we're stuck with the price difference of moving into a larger home that we can't afford.
“Lower rent prices this year will benefit tenants looking to move.”
Nathan Emerson, from industry group Propertymark, said: “It's encouraging to see new rental properties definitely coming onto the market.”
Slowing demand and increasing supply is also reflected in Rightmove's research. According to the report, the number of tenants sending property inquiries to rental agents has fallen by 13% compared to the same period last year.
At the same time, the number of new rental properties coming to market is 7% higher than last year.
This means that agents currently receive an average of 11 inquiries per available rental property.
This is almost triple the current rate of 4 in 2019.
Rightmove's Tim Bannister said: “We continue to see a gradual slowing of rent growth, with a significant contribution from improved supply and demand for rental properties.”
“We can’t keep up double-digit rent increases every year because tenant affordability won’t keep up. We think advertised rent increases will be much smaller in 2024, at 5% and 3% outside London. ” in the capital. ”