The average advertised rents for tenants outside of London have reached a new record of £1,316 per calendar month, Rightmove reveals.
The latest analysis found that the average advertised rents in London are £2,652 per calendar month.
The new record means that average advertised rents outside of London are 7% higher than at this time last year.
While the pace of rent growth has eased from its peak of 12% two years ago, Rightmove says it is still much higher than the more normal level of around 2% per year seen before the pandemic.
Rightmove’s analysis shows that approximately 120,000 more rental properties are needed onto the market to achieve this more sustainable level of 2% rent growth per year, based on the current level of demand.
The UK property website explains that the imbalance between supply and demand from tenants enquiring about homes is one of the key drivers behind the rapid increase in advertised rents since the pandemic.
Analysis shows that Scotland is currently the hardest hit by supply and demand imbalances, while London is the least affected.
At this time in 2022 and 2023, London saw the joint biggest increases in yearly rents, following a significant widening in the gap between supply and demand during the pandemic.
A decrease of 15% in the number of tenants looking to move in London, and an increase of 16% in the number of available properties to rent in the capital, means that London has seen the biggest overall improvement in supply and demand compared to this time last year.
The result is that rental price growth in London has slowed from its peak of +18% in 2022, to +4%, the joint smallest yearly rise of all areas in Great Britain.
Rightmove urges the next government to streamline the planning process, accelerate housebuilding, and provide incentives for landlords to invest in more homes for tenants, to improve the supply and demand imbalance in the rental market and ensure that growth in rental prices is sustainable.
Rightmove property expert Tim Bannister says: “We’ve been talking about the imbalance between supply and demand in the rental market for a long time now, so it’s easy to forget that there was a time before the pandemic where rental price growth was more stable.”
“Double-digit yearly rent increases were not sustainable, and, whilst there has been some improvement in the ratio between supply and demand, price growth at +7% suggest we are still out of balance.”
