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The cost of rent in London has climbed for a 13th consecutive quarter to hit a record high of £2,695 per month, while tenants across the rest of the UK are paying on average £1,341.
The data from property site Rightmove (RMV.L) showed that advertised rents are 4.7% higher than this time last year, though this is the slowest rate of growth since 2021. Tenants might struggle to feel this relief in their pockets as the average advertised rent of a home outside London dropped by just 0.2% compared with last quarter, equating to a drop of just £3.
Rightmove’s property expert, Colleen Babcock, said: “A first quarterly drop in rents is the culmination of several months of improvement in the balance between supply and demand.
“While new tenants are still paying more than they were at this time last year, the pace of growth continues to slow. However, though this is the big picture of market activity, agents on the ground still tell us that the market is very hot, and some areas have improved more than others when it comes to the supply and demand balance.
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Average advertised rents in London continued to rise, reaching a 13th quarterly record in a row of £2,695 per calendar month. But Rightmove said the quarterly increase in monthly asking rents in London was relatively small, at 0.1% or £1.
Average rents in London were 2.4% higher than a year ago — the lowest increase since 2021.
A rising supply of rental homes to choose from was improving the balance of supply and demand, the website said, although there were still 10 applications being made typically per rental property.
Rightmove said that looking across Britain, rental supply had increased the most in the north-east of England, and least in Wales.
John Baybut, managing director at Berkeley Shaw Real Estate in Liverpool, said: “Demand is generally still pretty strong and the market is still busier than before the pandemic. Tenants are paying very high rents, so with more supply on the market now, some are being more ‘choosy’.
“Some have also decided the costs of moving are too expensive and have decided to stay put. Landlords have to be careful to price accurately right now, despite having their own affordability pressures with high mortgage rates.
"Landlords need to work closely with experts to set the right price and keep their home occupied in the current market, reducing the risk of void periods.”
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Some rental sector demand may have moved across to the house sales market, Rightmove suggested, helped by mortgage rate reductions and rising wages.