Average monthly rents ‘hit record high’ as estate agents get ‘11 inquiries per home’

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The common monthly hire being requested exterior London reached a record £1,280 within the closing quarter of 2023, in accordance with a property web site.

Rightmove, which launched the index protecting Britain, stated agents are receiving 11 inquiries usually per obtainable rental property.

But it added that 2024 is predicted to be a 12 months when the tempo of rental development slows down.

A 0.2 per cent quarterly enhance in asking rents within the final three months of 2023 was the smallest leap since 2019, indicating that the tempo of hire rises is slowing.

There have additionally been indicators that extra tenants are hitting the bounds of what they will pay, with practically 1 / 4 (23 per cent) of rental properties needing a discount in marketed hire, in contrast with 16 per cent a 12 months earlier.

Advertised rents within the closing quarter of 2023 had been, on common, 9.2 per cent increased than a 12 months earlier.

Despite being a major enhance, Rightmove stated it was the bottom annual development in rents seen since 2021.

In London, asking rents additionally hit a record excessive, at £2,631 per month on common. This was a 0.2 per cent quarterly enhance, and 6.1 per cent increased than a 12 months earlier.

Rightmove stated it’s the first time that annual development in asking rents in London has been in single digits since 2021.

The property web site predicts that rents will likely be 5% increased exterior London by the top of 2024, and three per cent up in London.

One of the primary contributors to the slowing of hire rises, and the anticipation of an extra slowdown in 2024, is an enchancment within the steadiness of provide and demand within the rental market, the web site stated.

But it added that the rental market remains to be very busy in contrast with pre-coronavirus pandemic ranges.

Rightmove’s director of property science, Tim Bannister, stated: “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 per cent outside of London, and 3 per cent in the capital.”

Rightmove’s report additionally quoted agents’ views.

Hayley Brinn, director on the Total Letting Service, stated: “The market is still really busy, and the high number of applicants per property is being exacerbated by some landlords leaving the market.

“Prices appear to be levelling out now as more choice becomes available, with tenants becoming more price-sensitive, or just reaching the maximum of what they can afford to pay. The prices of larger properties in particular are slowing down, unless the landlord accepts an offer.

“Some tenants are reluctant to move unless they have no choice, due to the risk of being charged higher rents elsewhere, while other tenants who may want to move are stuck due to their current rent being below market value, and the price gap to move to a larger house is out of their reach.

“Rent prices slowing this year would benefit these tenants wanting to move.”

Peter Lee, director at Redbrik in Sheffield, stated: “It’s important that landlords are up to date on the latest market trends and activity in their area so that they can price accurately, and secure the best tenant for the long term, and minimise void periods.”