London asking rents hit record high of £2,480 pcm

Landlords are asking for a record high rent of £1,172 per month, according to property portal Rightmove, as market pundits warn rents will keep on rising.

The property portal has published data for the fourth quarter of 2022 and it also reveals that the capital’s rents leapt by 5.8 percent on the previous quarter to reach £2,480. However, it appears that 2023 has seen competition for rental homes easing with a growing supply of property for renters – but there’s still an issue with supply and demand.

Last year saw the second-highest annual rent growth ever recorded, with average rents for newly listed properties up 9.7pc outside London. This comes after 2021 saw the largest YoY increase of 9.9pc.

Urgent need for Landlords to balance rent rises

According to Rightmove, asking rents across Britain will rise a further 5pc in 2023 because of the ongoing imbalance between the number of those looking to rent and the number of rental properties available. While there is further bad news for renters, market analysts and various estate agents have suggested that there is an urgent need for Landlords to balance rent rises.

The predicted rise in rents will nonetheless far outstrip the pre-pandemic average, albeit there are signs that competition between tenants has begun to ease, with available properties to rent in December up 13pc compared with the same period the previous year. “Although the fierce competition among tenants to find a home is starting to ease, it is still double the level it was back in 2019,” said Tim Bannister, Director of Property Science and Innovation, “Letting agents are seeing extremely high volumes of tenant enquiries and dealing with tens of potential tenants for each available property.”

Pain for renters continues as fierce competition set to persist into 2023; London asking rent hit a record of £2,480 pcm while Inner London rents surpass £3,000 pcm for the first time. Source: Rightmove

Bannister sounded a word of caution “Landlords will need to balance any rent rises with what tenants can afford to pay in their local area, to continue to find tenants quickly and avoid any periods where their home is empty due to tenants not being able to meet the asking rent.”

“There appears to be some more property choice for renters compared to the record low levels of last year which would slightly ease the fierce competition to secure a home’” Bannister added. “This is why we’re forecasting that the pace of annual growth will ease to around 5pc by the end of the year nationally, although this would still significantly exceed the average of 2pc that we saw during the five years before the pandemic.”

Competition has dropped by a third since the peak in September of last year, when the gap between rental stock and tenant demand was at its most acute and is down 6pc compared with last year.

Rents outside of London

Rents outside of the capital have also set a record, Rightmove says, with a new high of £1,172 per month – that’s an increase of 9.7 percent in a year. The number of properties available to rent increased by 13 percent, the biggest jump since 2013. Tenants enquiring about rental properties rose by 7 percent in the same period, and that’s a 53 percent rise compared to 2019.

Elsewhere, Wales and the South West saw the biggest rise in the number of properties to rent. This led to a drop of 1 percent in average asking prices.

Rightmove’s prediction of the expected rental rise this years is due to the ongoing imbalance between the number of people who are looking for a home to rent, and the number of properties to rent available. Though historically this would be a significant rise in annual asking rent growth, it would mark a slowing in the pace of growth from the previous two years. Demand remains very strong, but there are signs of more properties to rent compared with last year, which would ease competition and the pace of rent rises this year.

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