Rightmove warns that cash-strapped tenants are reaching a tipping point, with more landlords forced to reduce advertised rents.
Average advertised rents ended last year 10% higher in the UK outside London and 6% higher in the capital, and the platform predicts that these are set to be 5% and 3% higher respectively by the end of 2024. However, in the final months of 2023, the number of rental properties seeing a reduction in asking rent during marketing went up, with 23% of properties now seeing a reduction, compared with 16% this time last year.
With more renters reaching an affordability ceiling, Rightmove suggests that landlords will need to balance the need to pay their mortgage with finding a good tenant they can develop a longer term relationship with and who can also afford the rent in their local area.
Rightmove’s lettings expert Christian Balshen says although landlords have sometimes needed to pass on higher costs, many tenants will have a cap on what they can or are prepared to pay in rent. “An increasing number of landlords are having to reduce their advertised rent, suggesting more are reaching this cap,” he adds.
New data from SpareRoom shows London rents fell for two consecutive months for the first time since February 2021. The record average monthly room rent in the capital of £1,030 in October fell to £1,019 in December, while average UK room rents also fell, down from a record high of £808 to £797, the first drop since December 2022.
Director Matt Hutchinson, says although he hopes this is an indication that things are starting to turn around, tenants are struggling and landlords are leaving the residential market in alarming numbers. He adds: “The simplest thing government could do in the upcoming budget is to level the playing field, to make renting to long term tenants a more attractive option.”