Record rents as lettings sector braces for Budget impact

Published on 16th October 2024, 3:57am

Average advertised rents outside London hit a 19th consecutive quarterly record of £1,344 per calendar month (pcm), says Rightmove.

This was up 5.2% from last year, although this is the slowest rate of growth since 2021.

London rents also hit a new record at £2,694 pcm, 2.5% higher than last year (£2,627 pcm) 

The portal says the balance between supply and demand continues to improve compared with last year, but letting agents are still very busy with high numbers of tenants looking to move.

The average number of enquiries per rental property is now 15, down from 23 last year, but nearly double the eight recorded in 2019; available supply has increased by 13% year-on-year, though it is still 27% below 2019 levels, highlighting continued pressure on rental availability.

More than a fifth of rental properties are currently seeing a reduction in the advertised rental price before finding a tenant, compared with 16% last year.

Rightmove says it appears some landlords are bracing for a potential Capital Gains Tax rise in the Autumn budget, as well as new EPC regulations, with a record proportion of former rental homes currently on the market for sale.

Director of Property Science Tim Bannister says: “While we’re seeing some signs of improvement in the market’s chronic levels of demand and supply imbalance helped by a slight increase in the number of available rental properties, affordability remains a key challenge for renters as prices continue to hit new records. Tenant competition has eased slightly from last year, but the market is still far from balanced.  

“We are seeing some landlords choosing to exit the market with potential tax changes and stricter EPC regulations as additional factors in landlords’ decision-making. With rental supply under strain, incentivizing landlords to invest in energy-efficient upgrades or offering tax relief could help maintain rental supply and, ultimately, ease affordability pressures for tenants.” 

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