Nikka Sulton

Rental prices across Great Britain have climbed to new record levels as the supply of available homes begins to tighten once again. According to the latest data from Rightmove, advertised rents reached all-time highs during the second quarter of the year, with both London and the rest of the country recording fresh peaks.

The figures suggest that although the rental market has become less competitive than it was during the post-pandemic surge, the balance between supply and demand continues to push rents upwards in many parts of the UK.

Rental Prices Continue to Rise

Outside London, the average advertised rent increased by 1.9% over the second quarter, reaching a record £1,397 per calendar month. This is the highest quarterly average seen since late 2025 and represents annual growth of 2.3%, up from 1.6% in the previous quarter.

London also recorded a new high, with average advertised rents rising by 2% to £2,791 per calendar month. The increase marks the strongest quarterly rise in the capital since 2023, with Inner London helping to drive much of the growth. Annual rental growth in London now stands at 2.9%.

While rents continue to increase, the pace of growth remains far more stable than during the intense rental market experienced in recent years.

Rental Supply Begins to Decline

One of the key reasons behind the latest rise in rents is a reduction in the number of homes available to let.

Rightmove reported that the supply of rental properties across Great Britain was 1% lower than during the same period last year. This is the first annual fall in available rental stock since 2022 and ends several years of steady growth in supply.

Rather than properties being snapped up more quickly, the decline appears to be the result of fewer landlords bringing new rental homes to the market.

With fewer new listings available, renters continue to face limited choice in many locations, even though overall market conditions have improved compared with the peak levels of competition seen in 2022.

Demand Remains Strong, But Competition Has Eased

Although tenant demand is still healthy, the level of competition has eased considerably over the past few years.

The average rental property received 10 enquiries during the second quarter, compared with 11 at the same time last year. This is a significant improvement from 2022, when the average property attracted 22 enquiries.

For comparison, before the pandemic, a typical rental home received around five enquiries.

This suggests that while the market remains competitive, it is gradually returning to more typical seasonal patterns rather than the extreme conditions experienced during the rental boom.

Regional Differences Continue

The latest figures also highlight significant regional variations across the country.

The North East and North West recorded the strongest annual rental growth, with advertised rents increasing by 4.1% in both regions. Meanwhile, growth was much more modest in the East Midlands and East of England, where rents rose by just 1.5%.

London, despite recording the highest average rents, saw the lowest level of tenant enquiries, averaging eight enquiries for each available property.

By contrast, the North West remained one of the busiest rental markets, with each property attracting an average of 14 enquiries.

These regional differences demonstrate that local supply and demand continue to have a major influence on rental pricing.

Mortgage Rates and Affordability Remain Key Factors

Rightmove also reported a small improvement in buy-to-let mortgage rates, with the average rate falling to 5.55%, down from 5.67% the previous month.

However, borrowing costs remain above the 5.20% recorded a year earlier, meaning many landlords are still facing higher financing costs than in previous years.

At the same time, annual wage growth has slowed to 4.4%, increasing pressure on affordability for many tenants. As living costs remain elevated, renters are becoming increasingly selective about the homes they choose, particularly in higher-priced areas.

A More Balanced Market, But Supply Remains Crucial

Despite record rental prices, Rightmove believes the market is now operating in a more balanced way than it was several years ago.

Property expert Colleen Babcock said rental growth is returning to more familiar seasonal trends, even though available housing stock is no longer increasing. She noted that more affordable regions continue to outperform many southern areas, while London’s sharp fall in rental supply has contributed to stronger price growth in the capital.

Looking ahead, the direction of the rental market is likely to depend heavily on whether more homes become available. If supply continues to fall while tenant demand remains steady, upward pressure on rents is expected to continue across much of Great Britain.