Editor's note: This brief was summarised by The Property AI Team from a report by Mortgage Strategy. Read the original article for full details.
Rents Reach New Highs as Supply Drops
Average rents outside London increased by 1.9% in the second quarter of 2024, reaching a record £1,397 per month, according to Rightmove’s latest index. This figure is 2.3% higher than the same period last year. In London, average rents rose by 2% over the quarter to a new high of £2,791, which is 2.9% higher than a year ago.
The report highlights that the rise in rents has been driven by a fall in the supply of available rental properties. Rightmove notes that rental stock is now 1% lower than a year ago, marking the first annual decline in available homes since 2022. Fewer properties have come onto the market, contributing to the upward pressure on rents.
Despite the reduction in supply, tenant competition has eased compared to previous years. The average rental property now receives 10 enquiries, down from 11 a year ago and 22 at the peak in 2022.
Regional Trends and Mortgage Rates
Annual rent growth remains strongest in northern England, with both the North East and North West recording annual increases of 4.1%. In contrast, the East Midlands and East of England saw annual growth of 1.5%.
Rightmove’s buy-to-let mortgage tracker shows that average two-year fixed rates with no fee have eased to 5.55%, down from 5.67% last month, but remain above the 5.2% recorded a year ago.
Market Context
Rightmove states that these figures are the first to reflect market conditions following the introduction of the Renters’ Rights Act in May. The trends currently appear steady and broadly in line with seasonal norms.
The report also notes that regional trends continue to vary, with more affordable northern areas seeing some of the strongest rental growth. London has experienced a notable increase in rents this quarter, alongside the largest drop in available rental supply.
The Association of Residential Letting Agents Propertymark president commented that while headline rent growth is relatively modest compared to recent peaks, the fall in newly listed rental homes could create a more persistent supply challenge if it continues.
Source: Mortgage Strategy