Average rents across the UK have risen by £417 per month compared to five years ago, representing a 44% increase since 2020. This growth continues to outpace the 36% increase in average earnings over the same period, according to the latest data from Rightmove.
Outside London, the average asking rent for newly listed properties now stands at £1,365 per month, following a 1.2% increase in the last quarter. In London, rents have reached a new high of £2,712, the 15th consecutive quarterly increase, although the pace of growth is slowing, with a rise of just 0.5% in this period.
Signs of Stabilisation Emerging
While average rents remain at record highs, the rate of annual rent growth appears to be moderating. Much of the steepest increases were seen during the peak activity of 2021 and 2022. Recent trends suggest the market is gradually moving toward a more balanced state, with improving supply and softening tenant demand.
The number of available rental properties has increased by 15% compared to this time last year, with some regions, such as the North East, seeing even greater supply growth. However, nationally, availability remains 29% below pre-pandemic levels in 2019.
Tenant demand, meanwhile, has dropped by 10% year-on-year. While the average rental listing still receives 11 enquiries, this is down from 16 last year, though still above the 2019 average of seven.
Buy-to-Let Investment Rebounding
Encouragingly for landlords, the latest lending figures from UK Finance show a 17% increase in buy-to-let loans so far this year. Loans specifically for new property purchases are up 28%, suggesting a renewed confidence in the rental sector and an effort to address the ongoing supply shortage.
Letting times have begun to stretch slightly. On average, it now takes 25 days for a property to go under offer, up from 21 days last year and 18 days at the height of the post-pandemic surge. Landlords may also be seeing more frequent rent reductions, which reflect both increased supply and a more discerning tenant base.
Pressures Remain on Landlords
Despite signs of improved market balance, many landlords continue to face significant pressures. Rising costs, including mortgage interest rates, ongoing tax changes, and regulatory compliance, are putting strain on returns and making future investment decisions more complex.
It remains vital that the role of private landlords in supporting the UK’s housing needs is recognised and supported. A stable and sustainable rental market depends on policies and market conditions that encourage long-term investment and help ensure that supply can meet demand across all regions, including here in the East Midlands.