Rents have soared to new highs, with one index revealing that average
advertised rents for new properties outside London have climbed 0.6% this
quarter to £1,349.
Rightmove says that in the capital,
rents have edged
up by just £3, or 0.1%, reaching £2,698, marking a 2.5% rise compared to
last year.
The quarterly increase outside London is the smallest for this period since
2020.
Notably, the
supply of rental properties
has surged, Rightmove says, with an 11% increase in new listings in March
compared to last year.
There was an 18% rise in overall available homes – as tenant enquiries
dipped by 7%, suggesting a shift in market dynamics.
PRS is very busy
The platform’s property expert, Colleen Babcock, said: “The rental market
is still really busy, and as the regional picture shows, it’s likely to
feel even busier in some areas of Great Britain than others.
“It’s good news for tenants that on the whole, the balance between supply
and demand is improving.”
She adds: “This is having a knock-on effect on rental prices, with rents
increasing more slowly and more landlords reducing their advertised price.”
Rise in BTL lending
Contributing to this influx of homes to rent is a 32% surge in buy to let
lending at the start of 2025, as reported by UK Finance recently.
There was also a 7% rise in first-time buyer sales and a 5% increase in
prospective buyers.
They were motivated by improving mortgage rates and a stamp duty hike in
England from 1st April which saw tenants moving to homeownership.
However, the market remains strained compared to pre-pandemic levels with
tenant demand being 10% higher than in 2019.
Rents rise by 40%
At the same time, the number of available properties is 33% lower,
resulting in an average of 12 enquiries per rental home.
This figure, though down from 16 last year, is double the 2019 average of
five.
Regional disparities are stark: the North West sees 18 enquiries per
property, while London, with a better supply-demand balance, averages
eight.
Affordability challenges also persist, with a quarter of rental properties
now seeing price reductions — the highest proportion since 2018.
Over the past five years, rents have risen 40%, outpacing a 31% increase in
average earnings, forcing landlords to adjust prices to attract tenants.
Goodlord says rents have risen
Further insights from
the Goodlord Rental Index
reveal that April 2025 marked the fourth consecutive month of rising rents.
It says the average rent per property in England reached £1,216, a 4.2%
increase from £1,166 in April 2024.
Regional variations highlight the North West, South East and West Midlands
with higher than 5% annual increases, while the East Midlands saw less than
1%.
In London, however, Goodlord’s data shows rents dipped by 1%
month-on-month.
The firm’s chief executive, William Reeve, said: “It’s been another month
of steadily increasing rents, at a time of the year when we often see more
ups and downs in terms of rental averages.
“This continues to underscore the prediction that this summer will bring a
rental spike across the country, although rising salaries will be
offsetting this impact for tenants to some degree.”
Student sector offers opportunities
The managing director of Accommodation for Students, Simon Thompson, said:
“For student landlords, the current market presents both opportunities and
challenges.
“The growth in rental supply and moderating demand offer a chance to
attract reliable tenants, particularly in high-demand areas like the North
West.
“However, the need for rent price reductions in a quarter of properties
signals affordability pressures.”
He adds: “The Renters’ Rights Bill, with measures like banning advance
rent, could complicate securing tenancies in competitive regions which is
why some student landlords will need to be aware of rent trends and react
accordingly.”
