31st
Jan 2025
Rightmove's recent survey of the private rental market reveals that while some landlords continue to exit the trend is no longer classed as an exodus.
Moreover, there is no sign of a surge in new property sales by landlords due to the incoming Renters Rights Bill being passed through parliament into law.
The portal also reports that the influx of new properties into the market remains stable compared to last year.
For the first time since before the pandemic in 2019, the average advertised rent for new market entries outside London has dropped this quarter by 0.2%, landing at £1,341 per month.
Although rents are still 4.7% higher than they were last year, this quarter’s decline signifies the slowest annual growth rate since 2021.
According to Rightmove, average advertised rents in London have continued to rise, hitting a record high for the 13th consecutive quarter at £2,695 per calendar month, although this quarter's increase is just 0.1%.
The rental market supply has increased, with the number of available properties rising by 13% compared to this time last year which has contributed to a better balance between supply and demand.
The number of prospective tenants seeking to move has fallen by 16% compared to last year but despite this the average number of applications is still substantial as averaging 10 per property.
The North East has the highest increase in supply whereas Wales has the lowest.
In 2024, an average of 15% of homes for sale were previously private rental properties, up from 13% in 2023.
This shift in supply and demand dynamics can be attributed to various factors as some demand appears to have shifted towards the sales market, particularly among first-time buyers, spurred by lower mortgage rates and higher average wages. Agents have reported that some tenants decided to remain in their current homes to avoid the costs associated with moving. Although some landlords are exiting the market, there are signs that others, especially larger landlords, are still actively investing.
Rightmove highlights that the Renters’ Rights Bill is merely the latest in a series of challenges for landlords. They have already had to cope with broader legislative changes and affordability issues caused by high mortgage rates, prompting some landlords to opt to sell their properties.
The online portal’s Colleen Babcock says: “A first quarterly drop in rents is the culmination of several months of improvement in the balance between supply and demand. While new tenants are still paying more than they were at this time last year, the pace of growth continues to slow.
“However, though this is the big picture of market activity, agents on the ground still tell us that the market is very hot, and some areas have improved more than others when it comes to the supply and demand balance. Our own data shows that the average rental property is still receiving 10 applications per property, which is lower than the peak, but still double the pre-pandemic norm. “
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