Rents in the UK fall for the first time in over five years
- Average rents in the UK have fallen by £3 to £1,341 a month for the first time since the end of 2019.
- In London, average advertised rents have increased to £2,695 per month, marking the 13th consecutive quarterly increase.
- The balance of supply and demand is shifting, leading to a potential slowdown in rental price growth.
In the UK, average rents have begun to decline, marking the first such drop since the end of 2019. Reports indicate that the average advertised cost of properties outside of London decreased by £3 to £1,341 a month, according to data from Rightmove. This development signifies a potential change in the rental market after a period of escalating costs, especially during the pandemic. Despite the decrease, annual rent increases still stand at 4.7 percent, albeit with the slowest growth rate since 2021. This trend in the rental market does not extend to London, where rents have continued to rise. London's rental market has experienced a boost, as average advertised rents hit £2,695 per month, reflecting a 0.1 percent or £1 quarterly increase. This increase represents the 13th consecutive quarter of rising rents in the city, although growth has slowed to its lowest point since 2021. With an average increase of 2.4 percent over the past year, pressures remain on renters in the capital despite a slight decline in the growth rate. The shift is attributed to a more favorable balance between supply and demand across the UK. Rising numbers of available rental homes have helped tenants to be more selective in their housing choices. Although there are still multiple applications for each property—approximately 10 per rental unit—this is a notable reduction from the peaks experienced during earlier phases of the pandemic. Many tenants are opting to remain in their current homes due to the costs associated with moving and macroeconomic uncertainties. Feedback from industry experts suggests that the decline in average rents heralds a phase of adjustment within the housing market and is a result of various factors, including increased mortgage rates and rising salaries. Agents have observed that while demand persists, it has moderated somewhat. Landlords are tasked with adjusting their prices accurately in response to these market changes. The housing market continues to attract significant investment, yet both landlords and tenants face challenges in navigating the altered landscape.