Rents reached new high in the capital at the end of 2024

Average advertised rents in London continue to rise, reaching a 13th consecutive quarterly record of £2,695 per calendar month (pcm), says Rightmove in its latest Rental Trends Tracker. However, the increase was only 0.1% in Q4 2024 (+£1), and average rents are now 2.4% higher compared to Q4 2023, the lowest this figure has been since 2021.

One of the drivers of slowing rent growth has been the gradual improvement in the available supply of rental properties across Great Britain, compared with recent supply-constrained years. The number of available rental properties was 13% higher than at the same time in 2023.

On the other side of the equation, there have been fewer prospective tenants looking to move at the end of last year, with the number of enquirers down by 16%. There are a combination of factors contributing to changing supply and demand dynamics.

Some demand may have transitioned to the sales market, particularly for first-time buyers, helped by lowering mortgage rates and higher average wages. Additionally, some tenants are choosing to stay put rather than move due to costs. While there is evidence of some landlords choosing to exit the market, there are also signs that other, perhaps larger landlords, are continuing to invest.

The average number of applications per rental property is still in double digits at 10, double the pre-pandemic average, so the market is still very busy historically.