The average advertised rent of properties coming to market outside of London has fallen this quarter for the first-time since pre-pandemic 2019, dropping by 0.2% to £1,341 per calendar month.
Rents are still 4.7% higher than this time last year, but this quarter’s fall makes it the slowest rate of annual growth since 2021.
These figures come from Rightmove which says average advertised rents in London continue to rise, reaching a 13th consecutive quarterly record of £2,695 per calendar month (pcm), however the increase is only 0.1% this quarter.
Supply in the rental market continues to increase, with the number of available rental properties now 13% higher than at the same time last year, improving the balance of supply and demand.
The number of prospective tenants looking to move has also dropped by 16% versus last year, however, the average number of applications per rental property is still in double digits at 10.
Supply has increased the most in the North East, and least in Wales.
There are currently no major signs of the upcoming Renters’ Rights Bill affecting rental market dynamics, however more broadly there is still evidence that some landlords are choosing to leave the market:
The number of new properties coming into the rental market is stable compared with last year, suggesting neither a sudden influx of newly advertised properties, nor a mass exodus of landlords.
On average, 15% of homes for sale were previously for rent in 2024, compared with 13% in 2023.
The portal says there are a combination of factors contributing to changing supply and demand dynamics.
Some demand may have transitioned to the sales market, particularly first-time buyers, helped by lowering mortgage rates and higher average wages. Agents report that some tenants are choosing to stay put rather than move due to costs, and while there is evidence of some landlords choosing to exit the market, there are also signs that other, perhaps larger landlords are continuing to invest.
Rightmove adds that the Renters’ Rights Bill is just the latest change for landlords to navigate, having also had to manage wider legislative changes and affordability challenges brought on by high mortgage rates, driving some landlords to choose to sell up.
On average, 15% of homes for sale on Rightmove were previously for rent in 2024, compared with 13% in 2023. London was the most affected, with nearly one in four (24%) homes for sale having previously been for rent, compared with one in five (20%) in 2023.
Rightmove property expert Colleen Babcock says: “A first quarterly drop in rents is the culmination of several months of improvement in the balance between supply and demand. While new tenants are still paying more than they were at this time last year, the pace of growth continues to slow.
“However, though this is the big picture of market activity, agents on the ground still tell us that the market is very hot, and some areas have improved more than others when it comes to the supply and demand balance. Our own data shows that the average rental property is still receiving 10 applications per property, which is lower than the peak, but still double the pre-pandemic norm. “
