The latest data from Rightmove paints a revealing picture of the rental market, showing that average advertised rents outside of London have hit a new peak at ...
£1,316 per month. Meanwhile, in London, the average stands higher at £2,652 per month.
Compared to a year ago, rents outside London have risen by 7%, a slight slowdown from the peak growth of 12% seen two years ago, yet still well above the pre-pandemic norm of around 2% annually.
Rightmove's analysis indicates that around 120,000 additional rental properties are needed to bring rent growth down to a sustainable 2% per year, given the current demand levels.
The imbalance between supply and demand remains a primary driver behind the rapid rent increases observed since the pandemic, with demand far outstripping the available housing stock in many areas. Scotland is particularly affected by these dynamics, while London has shown signs of improvement, experiencing a slowdown in rental price growth.
In London specifically, there has been a significant shift in supply and demand dynamics compared to last year, with a notable decrease of 15% in tenants looking to move and a simultaneous 16% increase in available rental properties. Consequently, rental price growth in London has moderated from its peak of 18% in 2022 to a more subdued 4% this year, the smallest increase across Great Britain.
Looking ahead, Rightmove calls upon future policymakers to streamline planning processes, boost housebuilding efforts, and incentivize landlords to invest in rental properties. These measures are crucial to addressing the supply-demand imbalance in the rental market and ensuring sustainable growth in rental prices.
Tim Bannister, Rightmove’s property expert, emphasized the need for balance: “While there has been some improvement in the supply-demand ratio, the current 7% rental price growth indicates we are still out of balance. Our analysis underscores the need for 120,000 more properties to achieve a sustainable rent growth of around 2% annually. It's imperative for the next government to prioritize planning improvements, accelerate housebuilding, and encourage greater rental market participation.
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