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

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The common month-to-month lease being requested exterior London reached a document £1,280 within the closing quarter of 2023, in accordance with a property web site.

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

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

A 0.2% quarterly improve in asking rents within the final three months of 2023 was the smallest leap 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 almost 1 / 4 (23%) of rental properties needing a discount in marketed lease, in contrast with 16% a yr earlier.

Marketed rents within the closing quarter of 2023 had been, on common, 9.2% greater than a yr earlier.

Regardless of being a major improve, Rightmove mentioned it was the bottom annual progress in rents seen since 2021.

In London, asking rents additionally hit a document excessive, at £2,631 per thirty days on common. This was a 0.2% quarterly improve, and 6.1% greater than a yr earlier.

Rightmove mentioned 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 might be 5% greater exterior London by the tip of 2024, and three% up in London.

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

However 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, mentioned: “The development of lease progress step by step slowing continues, with an enchancment within the provide and demand of rental properties having a giant contribution to that.

“We will’t maintain seeing double-digit lease rises yearly as tenant affordability merely can not sustain, and 2024 is the yr we predict there might be a a lot smaller improve in marketed rents of 5% exterior of London, and three% within the capital.”

Rightmove’s report additionally quoted brokers’ views.

Hayley Brinn, director on the Whole Letting Service, mentioned: “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 selection turns into obtainable, with tenants changing into extra price-sensitive, or simply reaching the utmost of what they’ll afford to pay. The costs of bigger properties particularly are slowing down, except the owner accepts a suggestion.

“Some tenants are reluctant to maneuver except they haven’t any selection, as a result of threat of being charged greater rents elsewhere, whereas different tenants who could need to transfer are caught because 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, mentioned: “It’s essential that landlords are updated on the newest 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 durations.”