Average private rents in Great Britain have climbed to new record highs, though in some regions there has been a small fall in the amount new tenants are being asked to pay, data shows.
The typical advertised private rent outside London for new properties coming on to the market rose to a record £1,280 a calendar month in the final quarter of 2023, according to the property website Rightmove. That is £2 higher than the £1,278 figure recorded in the third quarter – a sign that rental growth is slowing.
The average advertised rent outside London was 9.2% higher than a year ago but there were early signs that there could be “a better experience for many tenants trying to secure a rental property” this year, Rightmove said.
The seemingly relentless rise in rental costs has been adding to pressure on households, though the website said there was evidence that more tenants were hitting an “affordability ceiling”, with an increasing number of landlords having to lower asking prices.
The average London rent also reached a new high of £2,631, though the annual rate of rental growth in the capital had halved in recent months.
The Rightmove data suggests the overall figures disguise wide regional variations, with some locations still experiencing runaway increases and others small falls in the typical sums paid by new tenants.
Annual rental growth in hotspots such as Walton-on-Thames in Surrey, Coventry and Luton is 36.8%, 24.9% and 21% respectively. Other areas reporting growth of at least 20% include Preston in Lancashire, Dundee, and Salford, Greater Manchester.
The data also showed that in three regions – south-east England, the south-west and Scotland – the average advertised rent fell slightly, by 0.4-0.9% in October to December 2023 compared with the previous three months.
The trends of property supply improving and tenant demand easing are continuing. The number of people contacting letting agents about a move is 13% lower than the same period last year, while the number of new rental properties coming on to the market is 7% higher.
The data showed that almost a quarter (23%) of properties had their initially advertised rent reduced – up from 16% on this time last year – suggesting that in some cases asking prices were “increasingly out of reach for some tenants”, Rightmove said.
Tim Bannister, the website’s director of property science, said: “The trend of rent growth gradually slowing continues, with an improvement in the supply and demand of rental properties having a big contribution to that.
“We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up, and 2024 is the year we think there will be a much smaller increase in advertised rents of 5% outside London and 3% in the capital.”
