Average asking rents outside London have hit another new record of £1,126 per calendar month according to Rightmove.
This figure, for the end of the second quarter of the year, is up 3.5 per cent on the first quarter by 11.8 per cent compared to summer 2021.
This increase means that rents outside of London are rising at the highest annual rate Rightmove has ever recorded in 16 years of reporting. Rents have now risen by 19 per cent - or an average of £177 - since the pandemic started just over two years ago.
By contrast, it took eight years pre-pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the Covid outbreak. This quarter’s 3.5 per cent jump is the second highest quarterly rise in 10 years.
Rents in the capital also continue to rise as London reaches a new record average asking rent of £2,257 pcm this quarter. Annual growth in asking rents in London is now at 15.8 per cent, the fastest ever rate of any region.
Rising rents continue to be driven by a shortage of available rental stock, with low volumes struggling to meet high tenant demand over the past two years.
Although there is still a shortage of available homes to rent, there continues to be signs of this improving. The number of new rental listings is up eight per cent since the start of the year. June saw the highest number of new rental listings coming to market of any month this year so far.
Despite these signs, Rightmove reports that available rental stock is still down 26 per cent compared to last year’s levels, while demand is up six per cent, which means competition between tenants remains extremely fierce.
As high tenant demand continues to overtake last year’s exceptional levels, and available rental stock is slow to recover, the portal now expects average asking rent growth to reach eight per cent by the end of the year, up from five per cent predicted at the start of the year.
Affordability analysis from Rightmove shows that due to historically low interest rates, average mortgage payments on properties with two-bedrooms or fewer have risen by 13 per cent in the last 10 years, while equivalent rental payments on the same properties have risen by 40 per cent.
Despite challenges such as navigating legislation changes and potential updates to EPC requirements, more landlords are planning to expand their portfolio than reduce it, a sign of confidence in the market. A third of landlords recently surveyed said they plan to expand their portfolio during the next 12 months compared with only one in nine who plan to reduce the number of homes they rent out.
Rightmove’s Director of Property Science Tim Bannister adds: “The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand. Last year we saw exceptional numbers of tenants looking to move and this year we have seen no let-up in this trend.
“Whilst stock levels are beginning to improve, with June seeing the highest number of new rental listings coming to market so far this year, the wide gap that has been created between supply and demand over the last two years will take time to narrow. Until then, this imbalance will continue to support asking rent growth.”