The average monthly UK rent has risen by £80 in the last year, taking it to £1,226pcm. Overall, the rate at which new lets are rising annually has now slowed to 6.6%, down from 10% a year ago. This is the lowest rate of annual rental price inflation for 30 months (since Oct 2021) as demand slows from a high base and affordability constraints among renters mean rents can’t rise much further. If the rental increases that took place in the last three months were converted into a yearly rate, the annual rate of inflation would be 3%. This is the lowest it’s been for the month of April since 2021, and points to a continued slowdown in the rate of rental inflation for the rest of 2024.
The chronic imbalance between rental supply and demand is starting to narrow but remains well out of kilter. Demand for rented homes is slowing off a very high base as one-off pandemic factors start to recede and mortgage rates fall below 5%. Rental demand is down 25% over the last year but competition remains high, with 15 households chasing every rental home. This is more than double the pre-pandemic average of just six which was seen between 2017-2020.