The latest Rental Trends Tracker from Rightmove has revealed that the average advertised rent for new properties has reached a record high of £1,344 per calendar month (pcm) outside of London.
This marked a 5.2% increase from last year, but this was the slowest growth rate since 2021.
In London, rents set a new record at £2,694 pcm on average, reflecting a 2.5% rise compared to last year.
Rightmove anticipated that advertised rents would be 5% higher outside London and 3% higher in London by the end of 2024.
The balance between supply and demand is improving, with the average number of tenant enquiries per rental property falling to 15, down from 23 last year but still nearly double the 8 recorded in 2019.
The number of available rental properties was 13% higher than last year, but 27% below 2019 levels.
More than a fifth (21%) of rental properties saw reductions in advertised prices before securing tenants, the highest level for this time of year since 2020.
Landlords are preparing for a potential rise in Capital Gains Tax in the Autumn Budget, alongside challenges from new EPC regulations requiring rental properties to have a minimum EPC C rating by 2030.
Rightmove’s data showed that 18% of homes for sale were previously rental properties, an increase from 8% in 2010.
The firm’s Greener Homes report revealed that 2.9 million rental properties require upgrades to meet the EPC C rating, with an estimated cost of £23.4bn, or £8,074 per property.
Rightmove found that 50% of landlords are concerned about potential additional charges for not meeting EPC requirements, while 19% of renters believe stricter energy efficiency regulations should be prioritised by the new Government.
Rightmove said it was hopeful for Government measures, either in the upcoming Budget or soon after, to encourage landlords to stay in the market and assist with the transition to greener homes.
Tim Bannister, director of property science at Rightmove, said: “While we’re seeing some signs of improvement in the market’s chronic levels of demand and supply imbalance helped by a slight increase in the number of available rental properties, affordability remains a key challenge for renters as prices continue to hit new records.
“Tenant competition has eased slightly from last year, but the market is still far from balanced.
“We are seeing some landlords choosing to exit the market with potential tax changes and stricter EPC regulations as additional factors in landlords’ decision-making.
“With rental supply under strain, incentivising landlords to invest in energy-efficient upgrades or offering tax relief could help maintain rental supply and, ultimately, ease affordability pressures for tenants.”
Lynda Woodcock, managing director at Pheasant Retreats, said: “The rental market has been incredibly busy, but that’s largely due to the ongoing shortage of available properties.
“With so many landlords considering selling their properties ahead of new legislation, such as the proposed changes around EPC requirements and tax increases, we’re seeing fewer new instructions coming through.”
Woodcock added: “It’s becoming increasingly difficult to bring new properties to market while also managing the existing stock we have, which is already under pressure from high tenant demand.
“I anticipate the next few months will be challenging as the supply issue remains a concern and many landlords weigh up whether they want to stay in the market given the upcoming changes.”
