The boom in the rental market shows little sign of abating with the average number of enquiries per available property still nearly twice as high as pre-pandemic levels, latest data from Rightmove reveals.
Despite a seasonal dip in activity the market remains robust even with pressures on both supply and affordability.
Each available rental property now attracts 11 enquiries on average, up from six in the same period in 2019.
While the winter season typically heralds a slowdown, the current figures reflect a market far busier than historical norms. For comparison, the summer months saw agents managing an astonishing 19 enquiries per property.
EXCEPTIONALLY COMPETITIVE
This heightened activity highlights why many agents and prospective tenants continue to describe the rental market as exceptionally competitive, despite signs of improvement in the overall supply-demand balance this year.
Specifically, the number of available properties has risen by 7% compared to 2022, while the pool of prospective tenants has contracted by 19% year-on-year.
The improved supply-demand dynamics have contributed to a deceleration in rental price growth. As of now, average monthly rents outside London stand at £1,339, marking a 4.5% year-on-year increase – the slowest rate of annual growth since 2021. In London, rents have risen by 2% over the same period.
PROPERTY SHORTAGE
Looking ahead, Rightmove forecasts that newly advertised rents will climb by a more moderate 3% both inside and outside the capital by the end of 2025. While the persistent shortage of rental properties will continue to exert upward pressure on rents, affordability challenges are becoming increasingly pronounced.
Tenants appear to be reaching their financial limits, evidenced by the growing proportion of rental properties requiring price reductions to secure tenants. Currently, 26% of rental listings are being adjusted downward, compared to 23% last year.
Over the past five years, average UK rents have surged by 40%, while earnings have increased by just 28%. This disparity is stretching affordability to critical levels, forcing tenants and landlords alike to adjust expectations.
SUPPLY AND DEMAND IMBALANCE
Rightmove’s Property Expert Tim Bannister says: “The ongoing imbalance between supply and demand continues to push rents upwards.
“However, affordability constraints – driven by rent increases outpacing wage growth – are becoming increasingly evident in the rising number of price reductions.
“While there are early signs of a more balanced market, agents are still managing high volumes of tenant enquiries, suggesting the rental sector remains far from ‘normal.’”
INCREASING COSTS
Angharad Trueman, ARLA Propertymark President and practicing letting agent, says: “The issue of demand far outstripping the number of homes available to rent is continuous.
“Landlords are also battling increasing costs including rising tax and mortgage costs, and many are finding it difficult to break even. The rental landscape continues to put pressure on investors and, ultimately, many are faced with the decision of exiting or considering exiting the market altogether.
“Without incentives for landlords to enter or remain in the market, rent prices and stock levels are likely to continue to worsen.”
