Average rents outside London rose by 1.9% during the second quarter after a decline in the supply of available properties, the latest index from Rightmove reveals.
The average advertised rent outside the capital reached a record high of £1,397 per month in the second quarter, 2.3% higher than the same quarter last year.
In London, rents rose by 2% during the second quarter, reaching a new record high of £2,791, which is 2.9% higher than the previous year.
Helping to pay for the price increases was the first annual decline in available rental homes since 2022.
Rightmove says rental stock is now 1% lower than a year ago, as the number of properties on the market has declined.
The portal says that despite the decline in supply, competition among tenants is still far below its post-pandemic peak.
The average rental property now receives 10 inquiries, compared to 11 inquiries a year ago and 22 inquiries at the peak of the market in 2022.
Rightmove’s buy-to-let mortgage tracker shows that average two-year fixed rates with no fees have fallen to 5.55%, down from 5.67% last month, although they are still higher than the 5.2% recorded a year ago.
The report found that annual rent growth remains strongest in the north of England, with the North East and North West both recording annual increases of 4.1%, compared to 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 Tenants’ Bill of Rights in May, and that trends currently look steady and broadly in line with seasonal norms.
“We are seeing new record average rents announced in both London and the rest of Britain outside the capital, but overall, we are seeing rents returning to familiar seasonal patterns and stable growth,” says Coleen Babcock, property expert at Rightmove.
“Although supply is no longer increasing, the market is still more balanced than it was at the height 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 saw a notable increase in rents this quarter, as well as the largest reduction in available rental supply, underscoring how local supply and demand dynamics continue to shape rental prices.”
Kim Ledbury, Chairman of the Association of Residential Letting Agents, says: “While headline rental growth remains relatively modest compared to the peaks seen in recent years, the decline in newly listed rental homes should not be overlooked.
“If fewer landlords put properties on the market over an extended period, this risks creating a more persistent supply challenge that could put renewed upward pressure on rents in the coming months.
“The data also reinforces the importance of professional property management in a changing market.
“As legislative requirements continue to evolve, landlords who obtain expert advice and invest in maintaining high-quality homes are more likely to retain tenants, reduce costly vacancy periods and support a more stable private rental sector. Increased confidence in responsible landlords remaining in or entering the market will be essential if the sector is to keep pace with housing demand in the long term.”
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