UK rental prices reach new highs as supply falls
Average advertised rents outside London have reached £1,418 per calendar month, marking a new record, according to data from property portal Rightmove.
The figures show asking rent prices increased by 1.5% this quarter, though annual rental growth has moderated to 2.4%, down from the higher rates seen in previous years.
The number of available rental properties nationally has fallen by 2% compared to a year ago, while tenant demand has also declined by 2% over the same period.
London market tightens further
The capital has seen average advertised rents climb to £2,825 per calendar month, with annual growth of 3.2%, exceeding the national rate outside London.
London faces a more acute supply shortage, with total available rental listings down 9% year-on-year, newly listed properties down 7%, and tenant demand up 6% compared to last year.
Lower-priced areas across Britain are experiencing the fastest rental growth rates, though London ranks as the third fastest region for annual rental increases.
Landlord activity remains stable
The proportion of homes for sale that were previously rented stands at around 13% this year, up marginally from 12% last year, suggesting landlord exits remain relatively stable.
However, the proportion of rental properties that were previously for sale has decreased from 17% to 15%, indicating reduced new landlord investment in the sector. This trend comes as younger generations increasingly view home ownership as essential, potentially reducing the pool of long-term renters.
Colleen Babcock, property expert at Rightmove, said: “Average rents have reached another new record and have now surpassed £1,400 per month outside London for the first time. However, beneath the headline figure, rental growth has continued to settle compared with the exceptionally fast pace we saw a few years ago.”
She added: “Supply remains constrained, which is continuing to put upward pressure on rents, but demand is also more measured. That has helped to create a more balanced market overall, even though affordability remains a challenge for many renters.”
Kim Lidbury, President of ARLA Propertymark, noted that rental market health cannot be judged solely on growth rates. “Although rental growth has moderated, advertised rents remain at record levels, and the availability of suitable homes continues to be a major concern for tenants,” she said.
Lidbury highlighted that financing costs, taxation and regulatory requirements continue to influence landlord decisions on whether to invest in, retain or sell rental properties. With affordability improving in some segments of the sales market, landlords face additional considerations when evaluating their portfolios.
Outlook
While the slowdown in rental growth from previous years may provide some relief, the persistent supply constraints and record-high asking rents continue to challenge tenant affordability. Industry observers note that without significant increases in available rental stock, upward pressure on rents is likely to persist despite more moderate growth rates.
