Average advertised rents for tenants outside of London have reached a record £1,316 per calendar month, the latest rental market snapshot from Rightmove has revealed.
Average advertised rents outside of London were 7% higher than at this time last year.
The pace of rent growth eased from its peak of 12% two years ago, but was still much higher than the more normal level of around 2% per year seen before the pandemic.
In London, average advertised rents were found to be £2,652 per calendar month.
Rightmove’s analysis found that approximately 120,000 more rental properties were needed to achieve a more sustainable level of 2% rent growth per year.
The imbalance between supply and demand from tenants enquiring about homes was one of the key drivers behind the rapid increase in advertised rents since the pandemic.
Scotland was the hardest hit by supply and demand imbalances, while London remained the least affected.
An improvement in the balance between supply and demand in London contributed to a slowing of rental price growth.
In 2022 and 2023, London saw the joint biggest increases in yearly rents, following a significant widening in the gap between supply and demand during the pandemic.
A decrease of 15% in the number of tenants looking to move in London, and an increase of 16% in the number of available properties to rent, means London saw the biggest overall improvement in supply and demand compared to this time last year.
Rightmove called on the next Government to streamline the planning process, accelerate housebuilding, and provide incentives for landlords to invest in more homes for tenants, to improve the supply and demand imbalance in the rental market and ensure that growth in rental prices is sustainable.
Tim Bannister, property expert at Rightmove, said: “We’ve been talking about the imbalance between supply and demand in the rental market for a long time now, so it’s easy to forget that there was a time before the pandemic where rental price growth was more stable.
“Double-digit yearly rent increases were not sustainable, and, whilst there has been some improvement in the ratio between supply and demand, price growth at +7% suggest we are still out of balance.
“In fact, our analysis shows we would need 120,000 more properties on the rental market to achieve a more sustainable level of rent growth of around 2% per year.
“The next Government should be prioritising an improvement to the planning process, an acceleration of housebuilding, and encouraging more supply into the rental market.”
Nathan Emerson, CEO of Propertymark, said: “Propertymark has long argued that the private rental sector needs more houses to stabilise rental prices, but there is a myriad of other factors that can contribute towards making the market more attractive for both investors and tenants.
“With a general election coming this week, Propertymark would like to see the next government reform the tax system so that more investors can be persuaded to invest in the private rental sector and lower rents for tenants in the long-term.
“Whilst we support a greater supply of houses, there has to be a sensible deliverable programme mindful of protecting the green belt wherever possible.
“It would also be wise for them to avoid rent controls which have had a devastating effect on the private rental sector in Scotland.”
