The cost of rent outside of London have surged to a record high of £1,344 per calendar month (pcm), marking the 19th consecutive quarterly record.

This represents a 5.2% increase from last year, albeit the slowest rate of growth since 2021, according to figures from property site Rightmove. In London, the average rent has similarly soared to £2,694 pcm in the third quarter of 2024, a 2.5% rise from last year’s £2,627 pcm.

Both national and London price trends are in line with Rightmove’s end-of-year prediction for advertised rent growth, with advertised rents predicted to be 5% higher by the end of 2024 outside of London, and 3% higher in London.

The average number of inquiries per rental property has decreased to 15 from 23 last year, yet this figure is still nearly double the 8% recorded in 2019. Although available rental properties have increased by 13% year-on-year, they remain 27% below pre-pandemic levels.

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More than 21% of rental properties are now seeing a reduction in advertised prices before securing tenants, up from 16% last year. This marks the highest rate of price reductions for this time of year since 2020, indicating a shift in landlords’ strategies.

When it comes to rental hotspots, Batley saw the biggest increase year-on-year, as rent in the town went from an average of £670 pcm to £845. This marks a 26% increase.

Tim Bannister, Rightmove’s director of Property Science, said: “Although we’re seeing some improvement in the longstanding imbalance between demand and supply, affordability remains a critical challenge for renters as prices continue to reach new heights. While tenant competition has eased slightly from last year, the market is still far from balanced.

“We are witnessing some landlords exit the market in response to potential tax changes and stricter EPC regulations, impacting rental supply. Encouraging landlords to invest in energy-efficient upgrades or providing tax relief could help maintain rental supply and alleviate affordability pressures for tenants.”

Ahead the government’s autumn budget approaching, landlords are bracing for potential increases in Capital Gains Tax and new Energy Performance Certificate (EPC) regulations. Rumours of changes have led to a record proportion of former rental homes being listed for sale; currently, 18% of homes for sale were previously rentals, compared to just 8% in 2010.

According to Rightmove's Greener Homes report, approximately 2.9 million rental properties need upgrades to meet the minimum EPC C rating mandated by 2030, with an estimated total cost of £23.4bn, or roughly £8,074 per property.

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A survey of over 14,000 homeowners and renters, alongside more than 1,000 landlords, reveals that half of landlords are concerned about potential government penalties for failing to meet EPC standards. Meanwhile, 19% of renters prioritised stricter energy efficiency regulations as a top concern for the new government.

Lynda Woodcock, managing director at Pheasant Retreats in Witney, noted the intense competition in the rental market was largely by a shortage of available properties.

She said: “Many landlords are contemplating selling their properties in anticipation of new legislation regarding EPC requirements and tax increases. This trend is resulting in fewer new listings, complicating efforts to manage existing stock amid high tenant demand.”

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