Rightmove’s latest survey of the private rental market reveals that while some landlords are still leaving the sector, it is no longer a mass exodus as seen in previous years. The data suggests that the pace of departures has slowed significantly, indicating a more measured response to the ongoing changes in the rental landscape. While there are still landlords choosing to sell up, the rate of these sales appears to have stabilised.
The report also addresses concerns surrounding the imminent passing of the Renters’ Rights Bill into law, noting that there is no evidence of a significant surge in sales by landlords ahead of the bill’s enforcement. Many had speculated that the changes brought by the bill, which include new rights for renters and restrictions on certain landlord practices, might prompt an uptick in property sales by landlords looking to exit the market. However, Rightmove’s findings suggest that this is not the case, with the impact of the bill appearing to be more gradual rather than triggering a panic sell-off.
Looking at the wider trends within the rental market, Rightmove points out that the number of new properties coming onto the market has remained stable compared to the previous year. This stability indicates that while landlords may be adjusting to the new regulatory environment, the overall flow of rental properties has not drastically shifted. The balance of supply and demand seems to be holding steady, despite ongoing legislative changes, suggesting that the market is adapting to the evolving landscape with relative resilience.
For the first time since pre-pandemic 2019, the average advertised rent for properties outside of London has seen a slight decrease this quarter, falling by 0.2% to £1,341 per calendar month. While rents are still 4.7% higher than they were at this time last year, this dip marks the slowest rate of annual growth since 2021, indicating a shift in the pace of rent increases across the country.
The data, which comes from Rightmove, also highlights that rents in London continue to rise, albeit at a slower pace. The average advertised rent in the capital has reached £2,695 per calendar month, setting a 13th consecutive quarterly record. However, this quarter’s increase is minimal, with just a 0.1% rise compared to the previous period.
In terms of supply, the rental market has seen improvements, with the number of available rental properties rising by 13% compared to the same time last year. This increase in supply is helping to balance the supply-demand equation, providing more options for prospective tenants.
On the demand side, the number of people actively looking to move has dropped by 16% compared to last year. Despite this, the number of applications per rental property remains high, with an average of 10 applications per listing, reflecting continued competition among tenants for available properties.
Supply in the rental market has seen significant regional variations, with the North East experiencing the largest increase, while Wales has seen the least growth in available rental properties. This shift in supply has been one of the key factors impacting the broader housing market.
Looking at the figures for 2024, approximately 15% of homes for sale were previously rental properties, an increase from 13% in 2023. This change suggests a growing trend of landlords deciding to sell, which has been a notable development in the market.
Several factors are contributing to the changing dynamics of supply and demand. Some of the demand may have shifted to the sales market, particularly among first-time buyers, who have benefitted from lowering mortgage rates and higher average wages. Additionally, many tenants are choosing to remain in their current properties instead of moving due to rising costs associated with relocating.
While some landlords are exiting the rental market, there are indications that other, potentially larger, landlords are continuing to invest in property. Rightmove also points out that the Renters’ Rights Bill is just the latest in a series of legislative changes that landlords have had to adapt to, with many already facing broader affordability challenges and shifting regulations.
In 2024, Rightmove reported that, on average, 15% of homes for sale had previously been rental properties, a slight increase from 13% in 2023. London was particularly impacted, with nearly one in four (24%) homes for sale having been rentals, up from one in five (20%) the previous year.
Rightmove’s property expert, Colleen Babcock, explains that the first quarterly drop in rents marks the culmination of months of improving supply and demand balance. While rents are still higher than the same time last year, the rate of growth has slowed down significantly.
However, despite these broader trends, Babcock notes that the market remains active, with some areas experiencing more significant improvements than others in terms of supply and demand. Data from Rightmove also shows that, while the number of applications per rental property has decreased from peak levels, it remains well above the pre-pandemic norm, with an average of 10 applications per property.