The UK rental market has hit another milestone, reaching record-high prices both within and outside of London, according to recent data from Rightmove. The figures reveal a significant increase in rental costs, with prices outside of London soaring to £1,291 per month, marking an 8.5% rise compared to last year. Meanwhile, rents in the capital have surged by 5.3%, reaching £2,633 per month.
Despite this upward trend, rental growth across the UK is showing signs of slowing down. However, nearly 50,000 additional rental properties would be needed to return to the pre-pandemic level of rental supply. Rightmove’s latest data highlights that while the number of rental properties available to tenants has increased by 11% compared to last year, it still remains 26% below the levels seen in 2019.
Letting agents are experiencing a high level of demand, with an average of 13 enquiries per rental property. Although this is a decrease from 19 enquiries at this time last year, it still represents almost triple the average of five enquiries back in March 2019.
Tim Bannister, Rightmove’s Director of Property Science, comments on the current state of the rental market, stating, “The rental market is no longer at peak boiling point but it remains at a very hot simmer. Looking at data across the whole market, we can see some slow improvements for tenants with more choice, and competition with other tenants slowly starting to ease.”
Christian Balshen, Rightmove’s lettings expert, emphasizes the ongoing imbalance between supply and demand. “The fact that even with some improvements to the level of supply, we are still nearly 50,000 properties behind the pre-pandemic market, is a stark reminder that the industry needs more good quality rental homes and we need to encourage investment from landlords to provide them,” says Balshen.
Despite the high demand, Simon Thompson, Group Lettings Director at Miles & Barr in Kent, notes a slowdown in the pace of new supply entering the market. He attributes this to a combination of factors including a relatively low number of new landlords entering the market and some existing landlords opting to sell their properties.
Thompson explains, “There has been an increased number of price reductions, but this is mainly happening at the top end of the market, with smaller homes still in high demand. It appears stock will get tighter as we move into the summer months and as such the number of reductions will likely decrease.”
In conclusion, while rental prices continue to climb to new heights, there are indications that the market may be starting to stabilize. However, the persistent imbalance between supply and demand remains a challenge that requires attention from both policymakers and the industry as a whole.