Average asking rent reaches record £1,291 outside of London (and DOUBLE that at £2,633 in the capital)

• Average asking rents outside of London climbed to a 17th consecutive record

Average asking rents have reached another record, highlighting the competitive situation facing tenants.

The average asking price of a rental property outside of London climbed to a 17th consecutive record in the first three months of 2024, reaching £1,291 a month, according to Rightmove.

It is 8.5 per cent higher than a year ago, although the pace of rental growth continues to slow, dropping for the second quarter in a row.

At the same time, average rental asking prices in London also reached a record - although they rose by just £2, to £2,633 a month.

It means average advertised rents in the capital are now 5.3 per cent higher than at this time last year.

However, there is some positive news in these figures for tenants as they show rental growth slowing from the peak 16.1 per cent reached in the third quarter of 2022.

A lack of available rental properties and high demand has helped to push prices higher.

While the number of available properties to rent is 11 per cent higher than a year ago, it is still a significant 26 per cent below 2019 levels.

At the same time, demand from tenants remains high at 54 per cent more than 2019, although it has eased by 17 per cent compared to a year ago.

Rightmove claimed there are still nearly 50,000 rental properties needed to head back to the pre-pandemic level of rental supply.

Letting agents are struggling to cope with the high level of demand from tenants as there are not enough properties available, with an average of 13 enquiries per rental property.

This is down from 19 a year ago, but it is still nearly triple the average of five seen in March 2019.

Harriet Scanlan, of Richmond estate agency Antony Roberts, said: 'In the midst of a stock-deprived market, the delicate balance between supply and demand remains a central focus for both agents and landlord alike.

'In contrast to the frenetic pace of 2022, the current market reflects a subtle levelling of supply and demand dynamics. While rental increases persist, and void periods remain minimal, the dizzying heights experienced in the previous year have eased slightly.

'The scarcity of available properties presents both challenges and opportunities for agents. Limited stock can lead to increased competition among tenants, driving rental prices upwards. This poses a dilemma for tenants seeking affordable housing in an increasingly competitive market.'

Tenant affordability

The ability of tenants to afford current asking prices is being 'severely tested' according to Rightmove.

This is reflected in the amount of price reductions, which are at a five-year high for this time of year.

The proportion of rental properties that have been reduced in price is currently at 22 per cent, up from 16 per cent a year ago.

There has been an increased number of price reductions 

Simon Thompson, of lettings agent Miles & Barr in Kent, said: 'It is fair to say that price growth has eased, however the pace of new supply coming onto the market is also starting to slow, probably due to a combination of the relatively low numbers of new landlords coming into the market, and a few landlords looking to sell.

'There has been an increased number of price reductions, but this is mainly happening at the top end of the market, with smaller homes still in high demand.

'It appears stock will get tighter as we move into the summer months and as such the number of reductions will likely decrease.'

More rental properties needed

It follows the Renters Reform Bill being passed last week, with a new clause from the Government that prevents Section 21 notices from being outlawed until a review of the courts systems has taken place.

A Section 21 notice allows landlords to legally evict tenants without providing a reason for doing so, creating uncertainty for those renting the property.

The delays in banning the Section 21 notices create uncertainty among landlords.

Many landlords are concerned about the end of Section 21 notices amid fears that it will prevent them from being able to take back possession of a property when they need to.

The rental market is no longer at peak boiling point but it remains at a very hot simmer 

Some landlords may decide to leave the market and sell up if the banning of Section 21 is introduced.

Rightmove's Tim Bannister said: 'The rental market is no longer at peak boiling point but it remains at a very hot simmer.

'Looking at data across the whole market, we can see some slow improvements for tenants with more choice, and competition with other tenants slowly starting to ease.

'However, tenants may not feel the benefit of some of these improvements in their local market, as the balance between supply and demand remains so far from pre-pandemic levels.

'The fact that even with some improvements to the level of supply, we are still nearly 50,000 properties behind the pre-pandemic market, is a stark reminder that the industry needs more good quality rental homes, and we need to encourage investment from landlords to provide them.'