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Rents advertised for tenants outside London have hit a record average of £1,316 a month, underlining continuing strains on rental affordability.
Advertised rents outside the capital are now 7 per cent higher than this time last year, according to property site Rightmove. Though this is lower than the 12 per cent rises seen two years ago, it remains far above the 2 per cent average in the years before the pandemic.
Tim Bannister, Rightmove property expert, said those double-digit annual increases in rents had not been sustainable. He added, however, that “while there has been some improvement in the ratio between supply and demand, price growth at more than 7 per cent suggests we are still out of balance”.
London was one of the first locations to show sharp increases in rents following the pandemic. In 2022, its rents rose by an average 18 per cent. But after a more recent drop-off in demand for London rented homes and greater supply on the market, Rightmove’s regional analysis found it was looking at much slower than average growth at 4 per cent a year.
“A decrease of 15 per cent in the number of tenants looking to move in London, and an increase of 16 per cent in the number of available properties to rent in the capital means that London has seen the biggest overall improvement in supply and demand compared to this time last year,” Rightmove said.
Nonetheless, average advertised rents in the capital have hit £2,652 per month, far above those in other regions and nations. Affordability is a problem across the UK, with the proportion of gross earnings spent on rent at a record high, according to property site Zoopla in its recent rental report. In London, that means an average 41 per cent of earnings going on rent.
97The average number of would-be tenants registered with each UK letting agent
Other locations showing much bigger annual rent rises include north-east England (11 per cent), West Midlands (10 per cent) and Scotland (9 per cent), where the devolved government has introduced measures to limit rent rises.
Demand appears to be continuing to rise across the UK, with data from industry body Propertymark this week showing that the average number of aspiring tenants registered with letting agents had climbed from 90 in April to 97 in May.
Such is the disparity between the number of hopeful tenants and the supply of rented homes that analysis by Rightmove found that — even to keep rent rises within a pre-pandemic average of 2 per cent — some 120,000 extra rental homes would need to be built. As a result, the company is calling on the next government to provide more incentives for landlords to invest in the market.