The average advertised rent for new properties outside London rose by 0.6% this quarter to a record £1,349 per month, research from Rightmove found.
Rightmove’s Rental Trends Tracker revealed that in London, average rents increased by £3, or 0.1%, to £2,698 per month, marking the 14th record in a row.
Advertised rents in London were 2.5% higher than last year.
Research also found that the supply of rental properties increased, with new rental listings in March up 11% on last year and available homes 18% higher.
Meanwhile, the number of people looking to move dropped 7% compared to a year ago.
UK Finance reported buy-to-let (BTL) loans at the start of this year rose by 32% against the previous year.
Research also showed that more renters are becoming first-time buyers (FTBs), with sales agreed in this sector up 7% in the first quarter.
Mortgage rates and a rush before rises in Stamp Duty also drove activity.
Additionally, data revealed that tenant demand this quarter was still 10% higher than in 2019, but available homes are 33% lower.
According to Rightmove, a typical rented property had 12 enquiries this quarter, down from 16 at the start of last year but still twice the average in early 2019.
Regional differences remain, with London seeing an average of eight applications per home, compared to 18 in the North West.
Additionally, a quarter of rental properties had price reductions, the most seen since 2018, as landlords struggled with stretched affordability and more choice for tenants.
Colleen Babcock, property expert at Rightmove, said: “The rental market is still really busy, and as the regional picture shows, it’s likely to feel even busier in some areas of Great Britain than others.
“It’s good news for tenants that on the whole, the balance between supply and demand is improving.
“This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.”
Christian Balshen, lettings expert at Rightmove, said: “I don’t expect the Renters’ Rights Bill to have much of an impact on market activity, but there are a lot of wider implications for tenants and landlords.
“The banning of rent in advance for example, may make it more difficult for some types of tenants to secure a home, particularly in high-demand areas.
“Supply and demand in the rental market is really varied at the moment across Great Britain.”
Balshen added: “The number one thing landlords will still want is a good, reliable, long-term tenant, and there’s likely to be even more emphasis on this once the Bill comes into effect.”
Marc von Grundherr, director at Benham & Reeves in London, said: “We’ve seen a strong start to the year, with a surge in new listings entering the market, while tenant demand levels remain robust.
“The majority of landlords haven’t been particularly phased by the Renters’ Rights Bill. In essence, those providing good quality accommodation have little to worry about.
“Rental values have continued to climb which suggests that demand is still outstripping supply.”
von Grundherr added: “International tenants remain a significant driving force within the London rental market, while the return to the physical workplace also remains a key factor.
“The latest figures show that the number of new buy-to-let mortgages has increased considerably, as has the value of these loans.
“This activity is being driven by remortgages, which demonstrates the confidence that many buy-to-let investors still have within the sector, although there has also been an increase in new investment as well.”
Angharad Trueman, president of ARLA Propertymark, said: “Despite reports of a recent rise in the supply of privately rented homes, we continue to battle against a long-standing and critical imbalance in the number of homes available to rent and a rise in tenant demand.
“Fundamentally, this spike is not enough to meet demand long-term and we are unlikely to see any improvement in rent levels without the acknowledgment from various governments across the entire UK as to the importance that the private rented sector plays in housing the nation and the introduction of incentives for landlords to invest in the sector.”
