The average monthly rent being asked outside London reached a record £1,280 in the final quarter of 2023, according to a property website
The average monthly rent outside London hit a record high of £1,280 in the last quarter of 2023, according to property website Rightmove.
The site also revealed that estate agents typically receive 11 inquiries per available rental property. However, Rightmove predicts that the pace of rental growth will slow down in 2024.
The last three months of 2023 saw a modest 0.2% increase in asking rents, the smallest rise since 2019, suggesting that rent increases are slowing down. Signs show that more tenants are reaching their financial limits, with nearly a quarter (23%) of rental properties needing a reduction in advertised rent, compared to 16% a year earlier.
Despite this, advertised rents in the final quarter of 2023 were still 9.2% higher than the previous year. Although this is a significant increase, Rightmove said it was the lowest annual growth in rents seen since 2021.
In London, asking rents also reached a record high, averaging £2,631 per month. This was a slight 0.2% quarterly increase and 6.1% higher than a year earlier. For the first time since 2021, annual growth in asking rents in London has been in single digits.
Rightmove predicts that by the end of 2024, rents will be 5% higher outside London and 3% up in London. Rightmove’s report suggests that a balance in rental property supply and demand may slow down rent rises, with further deceleration expected in 2024.
Nevertheless, the rental market remains bustling compared to its pre-pandemic state. Tim Bannister, Rightmoves Director of Property Science, commented: “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.”
Property agents’ views were also highlighted in the report. Hayley Brinn from the Total Letting Service revealed: “The market is still really busy, and the high number of applicants per property is being exacerbated by some landlords leaving the market.”
She added: “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.”
Peter Lee, director at Redbrik in Sheffield, said: “It’s important that landlords are up to date on the latest market trends and activity in their area so that they can price accurately, and secure the best tenant for the long term, and minimise void periods.”
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