UK Asking Rents Hit Record Highs Amid Supply Squeeze
Rightmove reports record average asking rents in London and across Great Britain as limited housing supply and high mortgage rates drive prices upward.
Average asking rents in the United Kingdom have reached new record highs, with Rightmove reporting that London rents hit £2,825 per month and rents outside the capital surpassed £1,400 for the first time. In the third quarter, the typical asking rent outside London reached £1,418, a 2.4% annual increase. London experienced faster growth of 3.2%, fueled by a severe supply-demand imbalance where available rental homes fell by 9% while demand rose by 6%.
While current growth is slower than the 10% annual increases seen between 2021 and 2023, the market remains under pressure. Experts attribute the constrained supply to elevated borrowing costs and regulatory requirements. Average two-year fixed buy-to-let mortgage rates have risen to between 5.24% and 5.34%, up from 4.16% prior to the war in Iran, deterring new investment and increasing costs for landlords facing remortgaging.
Industry analysts note that landlords are increasingly raising rents within existing tenancies to align with current market levels. Despite the record prices, some experts suggest that tenants are becoming more discerning, making realistic pricing and property quality essential for landlords to attract renters in a market where affordability remains a systemic challenge.
