Average private rents in Great Britain have climbed to record highs, prompting a call for the next government to prioritise measures to help create an extra 120,000 rental properties.
Data shows that the typical advertised rent outside London reached a record £1,316 a calendar month in May, the property website Rightmove said. The figure for London was £2,652 a month – almost three times the £894 asked for in north-east England.
Rightmove said the average advertised rent outside London in May was an inflation-busting 7% higher than a year earlier.
In the capital, meanwhile, an improvement in the balance between supply and demand meant annual rent growth has slowed from its peak of 18% in 2022 to 4% in May this year, still higher than the 2% official consumer prices index (CPI) inflation figure for May.
Rightmove called on the next government “to accelerate housebuilding and incentivise landlords to invest in more homes for tenants” to help tackle the supply and demand imbalances and stabilise rental growth.
It said its analysis showed about 120,000 more rental properties were needed to return rent growth to “more normal levels” of about 2% a year, based on current demand.
Rent rises have been blamed largely on demand greatly outstripping supply, exacerbated by landlords with buy-to-let mortgages trying to pass on sizeable increases in their costs caused by higher interest rates.
In many areas there were “nowhere near enough homes to satisfy the number of tenants looking to move”, Rightmove said.
Scotland was the hardest hit by supply and demand imbalances, the property company said. By contrast, the situation had improved in London owing to fewer tenants looking to move and an increase in available properties to rent.
Tim Bannister, Rightmove’s property expert, said: “It’s easy to forget there was a time before the pandemic where rental price growth was more stable. [Annual] price growth at 7% suggests we are still out of balance.”
He added: “The next government should be prioritising an improvement to the planning process, an acceleration of housebuilding, and encouraging more supply into the rental market.”
Separate figures from Propertymark, a professional body for estate and letting agents, showed there were about nine new applicants registered for each available UK property in May.
It said that though most of its members reported that rents were continuing to increase or were static, there was some good news for prospective tenants with 18% of firms reporting rents falling against 12% in April.
