The average rent for new properties hitting the UK market has reached a record high, with prices outside of London climbing to an average of £1,344 per calendar month (pcm), according to the latest Rental Trends Tracker by Rightmove.

This represents a 5.2% increase compared to the same time last year, though the rise marks the slowest rate of rent growth since 2021. London, too, has seen a new record, with the average rent now at £2,694pcm, up 2.5% year-on-year.

These figures align with Rightmove’s predictions for the rental market, which forecast a 5% rise in advertised rents outside London and a 3% increase within the capital by the end of 2024.

Despite these record figures, there are signs of easing in tenant competition. The average number of tenant inquiries per available property has dropped to 15, down from 23 last year, though it remains nearly double the pre-pandemic average of eight recorded in 2019. Supply has also improved, with the number of available rental properties 13% higher than last year, though still significantly below pre-2020 levels.

Landlords are also feeling pressure, with 21% of rental properties experiencing price reductions before finding tenants—up from 16% last year, the highest level seen since 2020.

Experts suggest that looming tax changes and stricter energy regulations may be driving some landlords to exit the market. A record 18% of homes currently for sale were previously rental properties, a notable rise from 8% in 2010. This shift is thought to be influenced by concerns over potential increases in capital gains tax, expected to be addressed in the upcoming Autumn Budget, as well as the cost of upgrading properties to meet stricter Energy Performance Certificate (EPC) requirements. By 2030, all rental homes must have a minimum EPC rating of C.

Rightmove’s latest data shows that 2.9 million rental properties would require upgrades to meet these new standards, at an estimated national cost of £23.4 billion—around £8,074 per property.

The company’s survey of over 14,000 homeowners, renters, and 1,000 landlords revealed that while half of landlords are anxious about potential EPC-related costs, 19% of renters believe stricter energy regulations should be a top government priority.

Tim Bannister, Rightmove’s director of property science, said: “While we’re seeing some signs of improvement in the demand-supply imbalance with more properties available, affordability remains a significant issue for renters as prices continue to hit new highs. Competition for rentals has eased slightly, but the market is far from balanced.”

Bannister also noted that landlords leaving the market due to potential tax hikes and EPC regulations could further strain rental supply, calling on the government to introduce incentives for landlords to invest in energy-efficient upgrades and help stabilize the market.

Rental Price Trends

• National average rent (excluding London): £1,344 pcm, up 5.2% year-on-year
• Greater London average rent: £2,694 pcm, up 2.5% year-on-year
• Inner London: £3,175 pcm, up 1.6% year-on-year
• Outer London: £2,341 pcm, up 3.4% year-on-year