Rents have hit a new record high, according to the latest figures from Rightmove.
The average advertised rent of homes outside London has reached £1,349 a month, according to the property portal.
Meanwhile, in the capital, rents also rose to a fourteenth consecutive new record of £2,698 per month.
However, the market is less frenetic with average rents recording the smallest increase at this time of year since 2020, the property website said.
A quarter of rental properties are seeing a reduction in the advertised price, according to Rightmove – the most at this time of year since 2018.
The average advertised rent of new properties coming onto the market outside of London rose by 0.6 per cent during the first three months of this year. London rents rose by just 0.1 per cent.
More homes coming up for rent
The slowing rate of rent increases is thought to be largely down to more homes becoming available across the rental market.
The number of new properties coming into the market in March was 11 per cent ahead of the same period last year, and the overall number of rental homes now available is 18 per cent ahead of last year, it said.
Colleen Babcock, a property expert at Rightmove, said: ‘It’s good news for tenants that on the whole, the balance between supply and demand is improving.
‘This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.’
Slower growth in rents may be a sign that tenants have been stretched to the limit, with rents rising more than salaries on average.
Average earnings are up by 31 per cent since 2020, versus a 40 per cent increase in rents.
This may mean some landlords and agents are having to reduce the advertised price of their property in order to find a tenant.
Some of the demand has also been removed from the rental market thanks to an increase in first-time buyer activity at the start of this year.
In the first three months of this year, the number of sales being agreed on typical first-time buyer homes was 7 per cent higher than the same period a year ago.
Some of this is linked to the rush to move before stamp duty tax rose in England from 1 April as well as slightly improved mortgage rates compared with last year.
As a result, the number of prospective tenants looking to move is 7 per cent lower than March last year, according to Rightmove.
The average number of enquiries per rental property between January and March was 12, cooling from 16 at this time last year.
There are regional variations in supply and demand. For example, a typical rental home in London sees eight enquiries, compared with 18 in the North West.
Cooling market: Tenants are finding that the rental market is less competitive
While the market is cooling, it remains a much more competitive market for renters than in the pre-pandemic era.
Rightmove says the number of tenants looking to move is still 10 per cent higher, and the number of available properties is 33 per cent lower.
Where are rents rising most?
Despite the general fall, some areas are still seeing rental prices go through the roof.
For example, the average rent in Chippenham in Wiltshire is up 16.4 per cent year-on-year, according to Rightmove.
Rents in Stockport in Greater Manchester are up 16.1 per cent, while in Coventry average rents are up 14.1 per cent.
Despite slower growth in rents, it seems there is still appetite among landlords to invest in buy-to-let.
The number of landlords taking out buy-to-let mortgages rocketed in the final three months of last year, according to UK Finance.
UK Finance data shows that in the final three months of 2024, there were 52,648 new buy-to-let mortgages, worth £9.6billion.
This includes both purchases and remortgages, and is a 39.2 per cent increase compared to the same period in 2023.
Looking at purchase mortgages alone, the jump in buy-to-let loans is even greater.
In the final three months of 2024 there was a 46.4 per cent increase in buy-to-let mortgages taken out to buy a property, compared to the previous year.
UK Finance also says the total value of the mortgages taken out has increased 47.2 per cent compared to the previous year.
