Renting in the capital has never been so expensive. Rents in London have reached a new record high of £2,631 per month.
Figures for the final three months of the year show a slight increase on the previous quarter, but property website Rightmove is forecasting a 3 percent increase in London rents this year.
Outside London, the average asking rent for new properties coming onto the rental market also hit a new record of £1,280 per calendar month. Rightmove expects rents outside the capital to rise by 5% in 2024.
This is the 16th consecutive record high for newly advertised rental prices, as the real estate market continues to suffer from a shortage of available apartments to meet rising demand.
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The figures suggest that there has been some improvement, but tenant demand is waning.
The number of tenants sending relocation inquiries to real estate agents is 13% lower than in the same period last year. At the same time, the number of new rental properties coming onto the market is 7% higher than last year.
This means that the average number of enquiries agents receive per available rental property is currently 11.
“The trend of rental growth gradually slowing continues, with an improvement in rental supply and demand playing a large part in this,” said Tim Bannister, director of property science at Rightmove.
“We cannot see double-digit rent increases every year because tenants simply cannot afford them. In 2024, we expect a much smaller increase in asking rents, namely 5% outside London and 3% in the capital.”
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The data also showed that almost a quarter (23%) of rental properties had their asking rent reduced by landlords, a significant increase from the same period last year (16%). This suggests that in some areas the rent originally offered was too high to attract a tenant.
“The market is still very busy and the high number of interested parties per property is exacerbated by some landlords exiting the market. Prices now appear to be stabilising as more choice becomes available and tenants become more price sensitive or simply max out what they can afford,” said Hayley Brinn, director at The Total Letting Service.
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