London Rents Reach New High, Though Growth Shows Signs of Easing

Rightmove’s latest Rental Trends Tracker reports that average advertised rents in London have reached a thirteenth consecutive quarterly high, now standing at £2,695 per calendar month. While this represents a continued upward trajectory, the increase in Q4 2024 was just £1, or 0.1%, the smallest rise in the current cycle. On an annual basis, rents are now 2.4% higher than in Q4 2023, the lowest rate of annual growth since 2021.

One of the key factors behind this cooling in rental inflation is the gradual improvement in the supply of available properties. Across Great Britain, rental stock levels were 13% higher than at the same point in 2023, marking a welcome shift after several years of constrained availability.

At the same time, demand has shown signs of softening. The number of prospective tenants actively searching at the end of last year was down by 16%, suggesting a recalibration in market dynamics. Several factors are contributing to this shift, including first-time buyers taking advantage of lower mortgage rates and improved wage growth, prompting some to move from the rental sector to home ownership.

Moreover, a growing number of tenants are choosing to remain in their current properties rather than face the costs associated with moving. While some smaller landlords are reportedly leaving the market, there are clear signs that larger, institutional investors continue to acquire rental stock, reflecting long-term confidence in the sector.

Despite these changes, competition for quality rental homes remains intense. The average number of applications per property still stands at ten, twice the pre-pandemic norm, underscoring the strength of underlying demand.

At Rawlinson Gold Pinner, we continue to monitor these trends closely. For landlords, this remains an environment where well-priced, well-presented homes let quickly to reliable tenants. For renters, preparation and decisiveness are essential in such a competitive market.