Advertised rents have reached a new peak, but the rate of increase appears to be slowing down. Rightmove found the new high of £1,291 was 8.5 per cent up year-on-year – down on the fourth quarter of 2023’s rise of 9.2 per cent.
London asking rents were 5.3 per cent higher in the first quarter of 2024 than a year earlier, a slowdown from a 6.1 per cent. Simon Thompson, Group Lettings Director at Miles & Barr in Kent, says: “I think it is fair to say that price growth has eased, however the pace of new supply coming onto the market is also starting to slow, probably due to a combination of the relatively low numbers of new landlords coming into the market, and a few landlords looking to sell.
“There has been an increased number of price reductions, but this is mainly happening at the top end of the market, with smaller homes still in high-demand. It appears stock will get tighter as we move into the summer months and as such the number of reductions will likely decrease.”
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Christian Balshen, of Rightmove, added: “Whilst demand is gently easing and the supply of available properties is increasing, the market is still unable to fulfil the demand for rental properties, as it has been since the pandemic.
“It is clear that letting agents are still receiving a large number of enquiries for each property which they market. However just because there is very high demand doesn’t mean that tenants can automatically afford higher rents.”
Christian went on: “We are also seeing a slowdown in the rate at which rents are increasing, and a slight increase in the time it is taking to let properties in some areas. This may suggest that we are reaching a ceiling of rental affordability.
“In order to ensure that void periods are kept to a minimum, it is critical that landlords pay close attention to the time it is taking to let properties in their area and take into account both affordability and demand when setting rent levels.”
