London has hit a new average advertised rent of £2,825 per calendar month, says Rightmove.

The capital’s annual rent growth is now 3.2% above the national average outside of the capital.

There’s a supply squeeze in London, with the total number of available rental listings down 9% annually, newly listed rental homes down 7%, and renter demand up 6% compared with a year ago.

Rents are mostly rising faster in lower priced parts of Great Britain but London is the third fastest region for rental growth annually.

The proportion of homes for sale that were previously for rent, an indicator of landlords selling up, is stable this year at around 13% and only slightly up on last year (12%). 

However, the proportion of homes to rent that were previously for sale has decreased from 17% to 15%, an indicator of reduced landlord investment.

The average two-year fixed buy-to-let mortgage rate is now 5.34%, compared with 4.16% before the war in Iran started, making it less viable for potential landlords to consider purchasing more homes to rent

At a national level, the rental market remains relatively balanced. 

The number of available rental homes is 2% lower than a year ago, while renter demand is also down by around 2%. 

This means rents continue to face upward pressure from constrained supply, but without the severe supply and demand imbalance that drove rapid rental price inflation in previous years.

Landlord activity remains another important factor affecting the availability of rental homes.