Average asking rents ‘hit new record high with 11 inquiries typically per home’

Totally free actual time breaking information alerts despatched straight to your inbox signal as much as our breaking information emails

Signal as much as our free breaking information emails

The typical month-to-month lease being requested outdoors London reached a report £1,280 within the ultimate quarter of 2023, based on a property web site.

Rightmove, which launched the index overlaying Britain, stated brokers are receiving 11 inquiries sometimes per obtainable rental property.

Nevertheless it added that 2024 is anticipated to be a yr when the tempo of rental progress slows down.

A 0.2% quarterly enhance in asking rents within the final three months of 2023 was the smallest soar since 2019, indicating that the tempo of lease rises is slowing.

There have additionally been indicators that extra tenants are hitting the bounds of what they’ll pay, with practically 1 / 4 (23%) of rental properties needing a discount in marketed lease, in contrast with 16% a yr earlier.

Marketed rents within the ultimate quarter of 2023 have been, on common, 9.2% increased than a yr earlier.

Regardless of being a big enhance, Rightmove stated it was the bottom annual progress in rents seen since 2021.

In London, asking rents additionally hit a report excessive, at £2,631 monthly on common. This was a 0.2% quarterly enhance, and 6.1% increased than a yr earlier.

Rightmove stated it’s the first time that annual progress in asking rents in London has been in single digits since 2021.

The property web site predicts that rents shall be 5% increased outdoors London by the top of 2024, and three% up in London.

One of many primary contributors to the slowing of lease rises, and the anticipation of an extra slowdown in 2024, is an enchancment within the steadiness of provide and demand within the rental market, the web site stated.

Nevertheless it added that the rental market continues to be very busy in contrast with pre-coronavirus pandemic ranges.

Rightmove’s director of property science, Tim Bannister, stated: “The pattern of lease progress progressively slowing continues, with an enchancment within the provide and demand of rental properties having a giant contribution to that.

“We are able to’t hold seeing double-digit lease rises yearly as tenant affordability merely can’t sustain, and 2024 is the yr we predict there shall be a a lot smaller enhance in marketed rents of 5% outdoors of London, and three% within the capital.”

Rightmove’s report additionally quoted brokers’ views.

Hayley Brinn, director on the Complete Letting Service, stated: “The market continues to be actually busy, and the excessive variety of candidates per property is being exacerbated by some landlords leaving the market.

“Costs look like levelling out now as extra alternative turns into obtainable, with tenants turning into extra price-sensitive, or simply reaching the utmost of what they’ll afford to pay. The costs of bigger properties specifically are slowing down, until the owner accepts a suggestion.

“Some tenants are reluctant to maneuver until they don’t have any alternative, as a result of threat of being charged increased rents elsewhere, whereas different tenants who could need to transfer are caught as a consequence of their present lease being under market worth, and the worth hole to maneuver to a bigger home is out of their attain.

“Lease costs slowing this yr would profit these tenants wanting to maneuver.”

Peter Lee, director at Redbrik in Sheffield, stated: “It’s vital that landlords are updated on the most recent market traits and exercise of their space in order that they’ll worth precisely, and safe the perfect tenant for the long run, and minimise void intervals.”