Rents reach new high in Q2 as supply of homes limited: Rightmove – Mortgage Strategy

Average rents outside London rose by 1.9% over the second quarter after a fall in the supply of available properties, the latest index from Rightmove reveals.

The average advertised rent outside the capital reached a record £1,397 per month in Q2, which was 2.3% higher than the same quarter last year.

Within London, rents were up by 2% over the second quarter, reaching a new high of £2,791, which was 2.9% higher than a year earlier.

Helping to drive the price increases was the first annual fall in available rental homes since 2022.

Rightmove says rental stock is now 1% lower than a year ago, as fewer properties have come onto the market.

Despite the reduction in supply, tenant competition remains well below its post-pandemic peak, the portal says.

The average rental property now receives 10 enquiries, compared with 11 a year ago and 22 at the height of the market in 2022.

Rightmove’s buy-to-let mortgage tracker shows average two-year fixed rates with no fee have eased to 5.55%, down from 5.67% last month, although they remain above the 5.2% recorded a year ago.

The report found annual rent growth remains strongest in northern England, with both the North East and North West recording annual increases of 4.1%, compared with 1.5% in the East Midlands and East of England.

Rightmove says the figures are the first to reflect market conditions following the introduction of the Renters’ Rights Act in May and that trends currently appear steady and broadly in line with seasonal norms.

Rightmove property expert Colleen Babcock says: “We’re seeing new record average rents advertised in both London and in the rest of Britain outside of the capital, however overall, we’re seeing rents return to more familiar seasonal patterns and stable growth.

“Even though supply is no longer increasing, the market remains much more balanced than it was at the peak of competition in 2022.

“Regional trends also continue to vary significantly across the country, with more affordable northern areas still seeing some of the strongest rental growth.

“London has seen a notable increase in rents this quarter, and also the largest drop in available rental supply, underlining how local supply and demand dynamics continue to shape rental pricing.”

Association of Residential Letting Agents Propertymark president Kim Lidbury says: “While headline rent growth remains relatively modest compared with the peaks seen in recent years, the fall in newly listed rental homes should not be overlooked.

“If fewer landlords are bringing properties to market over a sustained period, this risks creating a more persistent supply challenge that may place renewed upward pressure on rents in the months ahead.

“The data also reinforces the importance of professional property management in a changing market.

“As legislative requirements continue to evolve, landlords who access expert advice and invest in maintaining high-quality homes are more likely to retain tenants, reduce costly void periods and support a more stable private rented sector. Increasing confidence for responsible landlords to remain in, or enter, the market will be essential if the sector is to keep pace with long-term housing demand.”