The rental market has been buzzing in recent years, with headlines focused on the sky-high demand for rental homes and the mad rush of people hunting for places to live. It seemed like there were always more renters than homes available! But there’s a shift happening, and it’s bringing some good news for those of you looking to move.
Despite the rental market staying busy, that overwhelming demand is finally starting to ease. In fact, we’re seeing more rental properties on the market—7% more than this time last year, to be exact!
According to our latest Rental Price Tracker, while average rents have hit a new high, rising to a national monthly average of £1,280, the pace of rental price growth is starting to slow. We’ve seen the smallest quarterly rent increase in three years, with rents going up by just £2 a month nationally, and £4 in London, which is only a 0.2% rise.
Expert Insights on the Rental Market
Property expert, Tim Bannister from Rightmove, sums it up perfectly: “The trend of rent growth gradually slowing continues, with an improvement in the supply and demand of rental properties having a big contribution to that. We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up, and 2024 is the year we think there will be a much smaller increase in advertised rents of 5% outside of London, and 3% in the capital.”
How Busy Is the Rental Market Right Now?
The rental market is starting to cool off a little compared to the hectic post-pandemic years. Back then, demand was through the roof, and the imbalance between people looking to rent and available homes was massive. At the end of 2023, there were about 11 home-movers for every rental property, which, while still high, is a big drop from last year’s frenzy when there were 14 enquiries for every property listed.
If you’re planning to rent in 2024, you’re in luck! You’ll likely find more homes on the market and a slightly calmer scene, as demand has eased a bit from those intense post-pandemic levels.
Is Rental Price Growth Really Slowing?
Yes! We’re seeing it first hand. Average rents increased by just 0.2% in the last three months of 2023—a much smaller jump than the 3.8% rise we saw in the previous quarter. Plus, more properties are now being reduced from their original asking prices—23% of rentals are being discounted, compared to only 16% a year ago.
What Are the Experts Saying?
Rental market experts are echoing these positive changes! Hayly Brin, Director at The Total Letting Service, says: “Prices appear to be levelling out now as more choice becomes available, with tenants becoming more price sensitive, or just reaching the maximum of what they can afford to pay. Some tenants are reluctant to move unless they have no choice due to the risk of higher rents elsewhere.”
Alison Jones, Director at Stepping Stones Letting in Banbury, points out that lettings agents are also crucial in this market. They help landlords stay updated on the latest trends and price their properties right, ensuring they find the best tenants and avoid having homes sitting empty.
What Can We Expect in the Rental Market for 2024?
The outlook for 2024 is looking brighter for renters! We’re expecting a smoother experience with a more balanced supply and demand, and gentler rental growth compared to the past few years.
Although rents are still on the rise, we’re predicting a more moderate increase of around 5% nationwide and about 3% in London. So, while prices may still climb, it’s a far cry from the steep increases we’ve seen recently, making it a more promising year ahead for renters!
If you’re thinking about moving, 2024 might be your year to find that perfect rental home without all the stress and pressure. Happy house hunting!