Record rents as 120,000 rental homes needed for normal price growth

• Average advertised rents have reached another new record of £1,316 per calendar month outside of London, and despite the pace of rent growth easing, are now 7% higher than last year
  • In London, average rents are now £2,652 per calendar month
• Rightmove’s analysis shows that approximately 120,000 more rental properties are needed on the market to bring rent growth back to more normal levels of around 2% per year, based on current levels of demand:
  • Scotland has the biggest imbalance between supply and demand, and London has the smallest
  • London rents are now 4% above last year, now the joint smallest increase of all regions having been the highest increase in the past two years, as the balance of supply and demand has improved
• Rightmove is calling on the next government to accelerate housebuilding, and incentivise landlords to invest in more homes for tenants, to improve the supply and demand imbalance in the rental market and stabilise yearly rent growth

The latest snapshot of the rental market from the UK’s biggest property website Rightmove, reveals that average advertised rents for tenants outside of London have reached a new record of £1,316 per calendar month.

In London, average advertised rents are now £2,652 per calendar month.

The new record means that average advertised rents outside of London are now 7% higher than at this time last year. Whilst the pace of rent growth has eased from its peak of 12% two years ago, it is still much higher than the more normal level of around 2% per year seen before the pandemic.

Rightmove’s analysis shows that approximately 120,000 more rental properties are needed onto the market to achieve this more sustainable level of 2% rent growth per year, based on the current level of demand.

The imbalance between supply and demand from tenants enquiring about homes is one of the key drivers behind the rapid increase in advertised rents since the pandemic, with nowhere near enough homes to satisfy the number of tenants looking to move.

Scotland is currently the hardest hit by supply and demand imbalances, while London is the least affected.

An improvement in the balance between supply and demand in London has contributed to a slowing of rental price growth.

At this time 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 in the capital, means that London has seen the biggest overall improvement in supply and demand compared to this time last year.

The result is that rental price growth in London has slowed from its peak of +18% in 2022, to +4%, the joint smallest yearly rise of all areas in Great Britain.

Rightmove is calling 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, Rightmove’s property expert, commented: “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.”

 

Regional rent prices

Area	Average advertised rent	Increase in advertised rent versus last year
North East	£894	+11%
West Midlands	£1,180	+10%
Scotland	£1,067	+9%
East of England	£1,597	+8%
North West	£1,146	+8%
Yorkshire and The Humber	£1,022	+8%
South West	£1,425	+7%
East Midlands	£1,150	+7%
UK excl. London	£1,316	+7%
South East	£1,836	+6%
London	£2,652	+4%
Wales	£1,065	+4%

 

 

Biggest imbalances between supply and demand

Ranking	Area
1	Scotland
2	North West
3	South West
4	North East
5	West Midlands
6	Wales
7	Yorkshire and The Humber
8	East of England
9	East Midlands
10	South East
11	London

 

 

ENDS

About Rightmove

• Rightmove has the UK’s largest selection of properties for sale and to rent, adds more listings than anyone else, and over 80% of all time spent on property portals is on Rightmove
• Rightmove’s vision is to give everyone the belief that they can make their move by giving people the best place to turn and return to for access to tools and expertise to make it happen
• People can search Rightmove for residential resale, new homes, rentals, commercial property and overseas properties and use tools and information including getting a Mortgage in Principle, checking local sold prices, property valuations, market trends, maps and schools
• Customers include the following key groups: estate agents, lettings agents, new homes developers, rental operators, commercial property operators and overseas property agents
• Using the UK’s largest housing datasets, we issue a number of regular reports to track housing market indicators: our monthly House Price Index (established 2002), our quarterly Rental Trends Tracker (established 2015), and a weekly Mortgage Rates Tracker (established 2023). Historical data is available on request
• Founded in 2000, Rightmove listed on the London Stock Exchange in 2006 and is a member of the FTSE 100 index