Average rent hits new high – but there’s some good news for tenants | Personal Finance | Finance

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Advertised have reached a new peak, but the rate of increase appears to be slowing down, according to property website Rightmove.

There are also indications that more landlords are being forced to lower their asking rents, especially for larger properties, to match what tenants can afford.

Across Britain, excluding , the average monthly rent asked for property coming onto the market in the first quarter of 2024 was £1,291, as per Rightmove’s findings.

This represented an 8.5 percent increase from the previous year, which was less than the annual rise of 9.2 percent recorded in the fourth quarter of 2023.

The average advertised rent in London also reached a new high in the first quarter of 2024, but at £2,633 per month, it was only £2 higher than the average asking rent in the fourth quarter of 2023.

London asking rents were 5.3 percent higher in the first quarter of 2024 than a year earlier, a slowdown from a 6.1 percent annual rise in the fourth quarter of 2023.

Although the balance of supply and demand is gradually improving from its peak, Rightmove estimates that nearly 50,000 rental properties would still be needed to return to the pre-pandemic level of rental supply.

The number of available rental properties is 11 percent higher than last year, but 26 percent below 2019 levels, the website said.

It added that, while the number of tenants looking for a home to rent is lower than a year ago, it is still higher than in 2019.

On average, letting agents are handling 13 queries per rental property, according to Rightmove.

Despite a decline from last year’s peak of 19, this number is almost triple the five-year average seen in March 2019.

Rightmove also highlighted indications that renter affordability is under strain, with rent reductions at a five-year high for this part of the year.

Currently, 22 percent of rental properties have experienced a price drop, an increase from 16 percent just a year ago. This is the highest for this time of year since 2019 when it was 23 percent, reveals Rightmove.

The most substantial homes, such as four-bedroom detached houses and those with five or more bedrooms, are most likely to see a reduction, the website noted.

It said a third (30 percent) of top-tier properties currently witness a price drop, marking a new record for this time of year in data dating back to 2012.

Tim Bannister, Rightmove’s Director of Property Science, commented: “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.”

Simon Thompson, group lettings director at Miles & Barr in Kent, commented: “I think it is fair to say that price growth has eased; however the pace of new supply coming on to 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.”

Halifax revealed on Monday that, in the home buyer market, prices for smaller homes such as flats have been increasing at a faster rate than bigger properties.

The bank stated that the first-time buyer market has shown “resilience”, and as interest rates have stabilised and buyers adjust to the new economic reality of owning a home, one way for buyers to compensate for higher borrowing costs is to target smaller properties.

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