Rental prices reach unprecedented levels. – TNT

The average advertised rent of new properties coming onto the market outside of London has risen by 0.6% this quarter to a new record of £1,349 per calendar month (pcm).

Despite the rise in average rents, this is the smallest increase across Great Britain excluding London at this time of year since 2020.

Average advertised in rents in London also rise by just £3, or 0.1%, to a 14th consecutive record of £2,698 per calendar month. The average advertised rent in London is now 2.5% higher than at this time last year.

These record rents come despite a boost in supply into the rental market. The number of new properties coming into the market in March was 11% ahead of the same period last year, and the overall number of rental homes available is 18% ahead of last year.

Meanwhile, the number of prospective tenants looking to move is 7% lower than at this time last year.

An increase in buy-to-let lending is helping to bring more supply into the rental market. The latest snapshot from UK Finance shows that at the start of this year, the number of new buy-to-let loans is up by 32% compared to the start of last year.

Another factor likely helping is a transition from some renters into the first-time buyer market.

In the first quarter of 2025, the number of sales being agreed in the typical first-time buyer sector was 7% higher than the same period a year ago, while the number of prospective new first-time buyers getting in touch to move was 5% higher. A rush to move before stamp duty tax rose in England from 1st April, and slightly improved mortgage rates compared with last year, encouraged activity.

In the rental market, compared with pre-pandemic 2019, the number of tenants looking to move is still 10% higher, and the number of available properties is 33% lower. This highlights the persisting imbalance between supply and demand despite the market easing.

This ongoing mismatch between supply and demand means that a typical rental home across Great Britain this quarter is still receiving 12 enquiries. While this has cooled from an average of 16 at the start of last year, it is still more than double the average of five seen over the first three months of 2019.

However, there are regional variations in supply and demand dynamics, which will likely make the market feel even busier in some local areas.

London currently has the best balance of supply and demand, though there are still an average of eight applications for every property. By contrast, a typical rental home in the North West gets 18 enquiries.

A knock-on impact of cooler demand and increasing choice for tenants appears to be an increase in the number of rental homes that see a reduction in the advertised price.

A quarter of rental properties are seeing a reduction in the advertised price, the most at this time of year since 2018.

It is also a sign of stretched affordability, with more landlords having to reduce the advertised price to find a tenant.

Over the last five years, average rent rises have outpaced increases in wages. Average earnings are up by 31% since 2020, versus a 40% increase in rents.

There are still no major signs of the upcoming Renters’ Rights Bill affecting rental market activity. However, the Bill is set have many wider implications for tenants, landlords and agents.

Rightmove’s Colleen Babcock commented: “The rental market is still really busy, and as the regional picture shows, it’s likely to feel even busier in some areas of Great Britain than others. It’s good news for tenants that on the whole, the balance between supply and demand is improving. This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.”

Christian Balshen, lettings commentator at Rightmove, said: “I don’t expect the Renters’ Rights Bill to have much of an impact on market activity, but there are a lot of wider implications for tenants and landlords. The banning of rent in advance for example, may make it more difficult for some types of tenants to secure a home, particularly in high-demand areas. Supply and demand in the rental market is really varied at the moment across Great Britain. The number one thing landlords will still want, is a good, reliable, long-term tenant, and there’s likely to be even more emphasis on this once the Bill comes into effect.”