London renters are paying £701 more per month than they were five years ago, new data from Rightmove shows.
The average asking price for a rental in the capital has risen from £2,011pcm at the start of the pandemic to a record £2,712pcm this quarter, representing an increase of 35 per cent.
In inner London, rents are even higher: £3,191pcm compared to £2,362pcm in outer London. Both have risen by 1.9 per cent over the last year.
Beyond London
Across the country, tenants have also seen their rents increase. Outside of London, rents have reached a record high of £1,355pcm which is £417 (44 per cent) more than in 2020.
Ascot in Berkshire and Farnham, Surrey, have seen some of the biggest rent rises in the last year, up 21 per cent (£396) and 19 per cent (£294) respectively.
This is followed by Rochdale and Stockport, both in greater Manchester, where tenants are paying 17 and 15 per cent more than the same time last year.
Glasgow, Birkenhead, Watford, Andover, Kidderminster and Prenton are also rental price hotpots this year, with rents increasing far beyond the national average.
“Despite another new record in average asking rents for tenants, the big picture is that yearly rent increases continue to slow, which is good news for tenants,” says Colleen Babcock, Rightmove’s property expert.
“Supply and demand is slowly rebalancing towards more normal levels, though we still have a way to go before we reach pre-2020 levels of available homes for tenants.
“The good news is that the latest industry snapshot suggests more investors are taking out buy-to-let loans compared with last year, which should help to bring even more homes to the rental market.”
Slowing growth
Rents may be at a record high, but price growth is slowing nationwide, Rightmove’s research shows. Compared to intense competition for lettings post-pandemic, which saw tenants queuing for properties, jumping through hoops to be selected and skyrocketing rents, things are beginning to calm down.
Rightmove says that the number of available properties to rent is now 15 per cent higher than this time last year, while the number of prospective tenants looking to move is 10 per cent lower.
Nationwide, there are 11 enquiries per typical rental property, with it taking an average of 25 days for a letting marketed on Rightmove to find a tenant. Last year, it took 21 days, and in 2022, it was 18.
Moreover, nearly a quarter of rental homes see reductions in price during marketing, Rightmove has found, representing the highest figure since 2017.
The improvement in supply is in part due to an uplift in rental property investment: the number of loans for buy-to-let properties has gone up by 17 per cent this year, and the number of new rental home purchases is up by 28 per cent.
“We’re seeing a shift in the rental market this quarter. Stock levels are up, and demand remains strong but more measured, bringing us closer to a sustainable balance. Average rents are still rising year-on-year, but at a slower pace. Pricing correctly from the outset is key, and being quick to adjust price in line with market response helps avoid unnecessary void periods,” says Andrew Ralph, managing director of lettings at Leaders Romans Group.
“Tenant affordability is a key focus. Matching the right tenants to the right homes is becoming more important than ever. The best outcomes, for landlords and tenants alike, are coming where there’s transparency, realistic pricing, and a shared understanding of future expectations.
“While some landlords are choosing to exit, the volume remains broadly in line with recent years. What’s more notable is the rise of a new generation of professional, tech-savvy investors entering the market, often with a long-term focus on capital growth. Many portfolio landlords remain active, particularly in areas with strong yields. The market is adapting, and while the challenges are real, the opportunities are still there for those taking a strategic view.”
But in London, the picture remains more mixed. Earlier this month, tenants were warned about another surge in rents as the number of homes made available by landlords is falling. An analysis for London Councils and Trust for London cautioned that properties are leaving the rental market at a faster rate in London’s most affordable locations.
“Private renters across London are facing the brunt of the housing crisis. The shortage of homes to rent is a one-way street toward higher rents and even less choice for tenants,” said Ben Beadle, chief executive of the NRLA.
“London needs more of all types of housing, and that has to include homes for private rent. It’s high time for policies that support investment in the homes renters desperately need.”
