The capital’s rental market continues to show signs of cooling down, with prices rising by just 1% year-on-year in May while the number of viewing request per property has dropped too.

Lettings platform Hello Neighbour’s monthly insights report found rents were up on April – with an increase across every bedroom size - but 1% down on the previous three months, with an average rent of £2,155.

It saw an average of 52 viewing requests per property on its platform, down from 62 in April, following a similar trend of a quieter May last year before the summer months. However, there were 16% fewer requests compared to May 2023, it says..

There was continued higher demand for outer London properties, with 84 viewing requests compared to 69 for Inner London. Barking and Dagenham took the top spot for the highest number of viewing requests over the past three months, with 192 requests per property.

Pricing

Hello Neighbour reports a 32% fall in landlords pricing their properties above market rates in the past 12 months, with half pricing above and half below market values.

CEO Richard Jenkins (pictured) explains they are under growing financial pressure due to increasing mortgage rates and maintenance costs, so need to try to achieve higher rents.

Meanwhile, some high street agents quote higher than market value rentals in order to win landlords’ business, setting an expectation of rental levels above the market average.

“Tenants are reaching unsustainable levels of rent affordability, as salaries have failed to keep pace with rising rent levels over the last few years, which is encouraging more valuations in line with the market average, hence the drop year-on-year,” adds Jenkins.

It points to Zoopla’s recent House Price Index report which shows that first-time buyers are motivated because they want to escape the rapid growth in rents in the private rented sector.