Rents Reach Record High Amid Landlord Exodus, Research Shows
The average advertised rent across the UK has surged to a new record high, despite growing numbers of landlords leaving the buy-to-let market, fearing capital gains tax hikes in the forthcoming Autumn Budget.
Data from Rightmove’s latest Rental Trends Tracker reveals that the average rent for new listings outside of London reached £1,344 per month between July and September 2024, a 5.2% increase compared to last year. This represents the slowest growth rate since 2021 but continues to set new records. In London, rents have also hit new highs, averaging £2,694 per month—a 2.5% annual increase.
Rightmove has warned that rental prices are likely to remain elevated, as a shrinking pool of available properties on the market is expected to worsen due to more landlords exiting the sector.
Why are Rents Still Rising?
A continued imbalance between supply and demand is driving rents higher, despite some signs of easing. Rightmove data shows that a record 18% of former rental properties are now up for sale, compared to just 8% in 2010. Many landlords are believed to be anticipating changes in the Autumn Budget, including possible capital gains tax hikes, and are also facing pressure from the Renters’ Rights Bill and stricter energy efficiency regulations.
“While the number of available rental properties has increased slightly, affordability remains a major concern as rents continue to hit new highs,” said Tim Bannister, Rightmove’s director of property science. “Tenant competition has eased somewhat from last year, but the market is still far from balanced.”
Is Buy-to-Let Still Worthwhile?
The buy-to-let market has faced significant challenges in recent years, from additional stamp duty on purchases to limitations on mortgage interest relief. The upcoming Renters’ Rights Bill will further complicate matters for landlords by tightening rules around tenant evictions.
At the same time, falling mortgage rates have made it easier for first-time buyers to step onto the property ladder, reducing demand for rental properties. According to Rightmove, the average number of tenant enquiries per available rental property has dropped to 15, down from 23 a year ago, though still nearly double the eight enquiries recorded in 2019.
Despite the increased supply of rental homes—up 13% from last year—rental availability remains 27% below 2019 levels, keeping pressure on prices. The cost-of-living crisis is also making it harder for tenants to meet rising rent demands. A fifth of rental properties are now seeing a reduction in their advertised rent before securing a tenant, the highest rate since 2020.
Landlords Weigh Their Options
“We’re seeing some landlords choosing to exit the market, driven by potential tax changes and stricter energy performance regulations,” Bannister added. He also called for government action to incentivize landlords to invest in energy-efficient upgrades, which could help maintain rental supply and ease affordability pressures for tenants.
Propertymark, a trade body representing estate agents, echoed the concern, warning that overregulation may deter future investment in the rental sector. Nathan Emerson, chief executive of Propertymark, urged the government to carefully assess the impact of new legislation, such as the Renters’ Rights Bill.
“Landlords have faced continuous financial and regulatory hurdles, and many have had no choice but to raise rents just to cover rising costs,” Emerson said. “The government’s reforms aim to improve standards, but it’s essential that they strike a balance that protects both landlords and tenants.”
With the Autumn Budget approaching, landlords and tenants alike will be watching closely to see what changes could shape the future of the UK’s rental market.