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Rental prices outside London fell quarter-on-quarter in late 2024 for the first time since before the pandemic, signalling a “key milestone” in Great Britain’s housing market after years of soaring rents.
The average advertised rent of properties beyond the capital fell 0.2 per cent to £1,341 between the third and the fourth quarter of 2024, marking the first drop since the end of 2019, according to data from the property portal Rightmove on Tuesday.
In London, a marginal 0.1 cent quarter-on-quarter growth in rental prices to £2,695 was the lowest since early 2021.
While modest, Rightmove said the drop marked a “key milestone” for the market as it brought an end to many months of record high rents, helped by weakened demand and improved supply of properties for tenants.
In the three years to the fourth quarter of 2023, rents in Great Britain excluding London rose 25 per cent, the data showed, boosted by higher borrowing costs and low availability of properties to rent.
“A first quarterly drop in rents is the culmination of several months of improvement in the balance between supply and demand,” said Rightmove’s property expert Colleen Babcock.
Demand pressures appear to be easing in the housing market, with Rightmove reporting a 16 per cent year-on-year decline in prospective tenant enquiries, as some renters opt to buy homes amid lower mortgage rates and rising wages.
Some tenants are also choosing to stay put rather than move because of costs, according to Rightmove.
Additionally, the supply of rental properties improved in the last quarter of 2024, with a 13 per cent increase in availability compared with the previous year, the research showed.
Rightmove said that while there was evidence of some landlords choosing to leave the market, other “perhaps larger” ones were continuing to invest.
However, the average number of applications per rental property was still in double digits at 10, double the pre-pandemic average, indicating a still “very busy” market.
This comes ahead of the increase in stamp duty announced in the Budget and taking effect in the spring. From April 1, the level at which the property levy becomes payable reverts to £300,000 from £425,000 for first-time buyers and to £125,000 from £250,000 for others.
The renters’ rights bill, which aims to reform the private rental sector and end “no fault” evictions, could also affect the market. But Rightmove noted “no major signs of an immediate impact” from the legislation which could come into effect this year.
The Rightmove rental price tracker, as well as similar data from Homelet and Zoopla, provide a more timely indicator of rental trends than the official data, as they track new tenancies rather than all rents.
Rents outside London were still 4.7 per cent higher than at the end of 2023, however price growth marked its slowest annual pace since early 2021.
In the capital, rental prices were up 2.4 per cent year-on-year, the lowest annual rate since early 2021.
Alex Bloxham, partner and head of residential lettings at the property consultancy Bidwells, said: “We’re seeing a cooling of what has been a ferociously hot rental market over the last year, where tenants have endured intense competition and consistent rental inflation.”
