The common marketed lease for newly listed properties exterior London has climbed by 1.5% this quarter (+£20) to succeed in a brand new report excessive of £1,385 per calendar month (pcm).
This marks the third consecutive quarterly report in 2025, although the annual price of progress has slowed to three.1%, the bottom since Q3 2020.
Within the capital, common marketed rents rose by 0.9% (+£24) this quarter to a different report of £2,736 pcm. Nevertheless, rents in London at the moment are just one.6% increased than a 12 months in the past, a determine not seen since Q2 2020, highlighting a cooling market.
The variety of properties accessible to lease has elevated by 9% year-on-year, serving to to stabilise lease progress throughout the nation. Regardless of this enchancment, provide stays 23% under 2019 ranges, although that is the closest the market has come to pre-pandemic situations in 4 years.
The tempo of latest rental listings, nonetheless, has slowed – now simply 1% increased than a 12 months in the past – whereas tenant demand has fallen 14% year-on-year, indicating a gradual rebalancing between provide and demand.
Coverage and tax modifications look like weighing on landlord sentiment. The stamp responsibility enhance on rental dwelling purchases launched final October, alongside rumours of a possible nationwide insurance coverage tax for landlords within the upcoming Autumn Finances, could also be discouraging new funding.
The forthcoming Renters’ Rights Invoice can be including uncertainty. In a latest Rightmove survey, one in three landlords mentioned they have been contemplating exiting the market sooner or later, whereas two-thirds (66%) felt unsupported by the federal government. Fewer than half (43%) mentioned they have been totally conscious of and ready for the incoming laws.
Though common earnings have risen by 5% over the previous 12 months – outpacing lease progress – renting nonetheless absorbs 44% of the common wage, up from 40% 5 years in the past.
For renters hoping to purchase, the common 20% deposit for a primary dwelling has elevated by over £5,000 within the final 5 years, from £40,326 to £45,374, additional stretching affordability.
Landlords additionally face monetary headwinds. The typical rate of interest on new buy-to-let mortgages is 4.87%, down from 5.21% final 12 months however properly above the two.93% price seen earlier than the 2022 mini-Finances.
Practically a 3rd (29%) of landlords report that rising mortgage charges are affecting their plans to develop, whereas 17% are contemplating decreasing the dimensions of their portfolios.
Rightmove’s Colleen Babcock mentioned: “The vast majority of landlords want to keep in market and even develop their portfolios which is constructive for tenants, however there are clearly challenges for these trying to put money into rental property. Sustained excessive mortgage prices imply landlords want to ensure purchases are viable, and uncertainty round laws just like the Renters’ Rights Invoice and what could or will not be within the upcoming Autumn Finances isn’t useful when trying to make monetary investments.
“Landlords who have been contemplating promoting up over the following 12 months informed us that laws modifications have been their largest supply of frustration. The federal government wants to think about this when setting its coverage agenda over the following twelve months, in any other case we might even see extra landlords select to depart the sector which can be to the detriment of tenants.”
