Rightmove has revealed that the average rental asking price is at an all-time high outside London, as seven weeks of lockdown-limited activity in the rental market has boosted demand to record levels.
In contrast, the capital’s asking rents started to fall across April and May. London asking rents are now lower than this time last year, and also £60 cheaper than during the first quarter of 2020.
New rental listings dropped by an average of 50% during lockdown, but are now up 1% on the same time last year. Total available stock is also up 1%. However, there are large variations at a local level, with total available stock currently up 41% in London and up 34% in Edinburgh, fuelled in-part by a surge in long-term rental supply from the curtailed holiday short-let market.
Overall rental demand is at a record high and Rightmove said this may lead to further upwards price pressure except in areas of over-supply. Monday is usually the busiest day for people enquiring about rental property, and it hit a record on Monday 6 July. Compared to this time last year demand is now 40% higher across Great Britain.
A study by Rightmove among over 400 landlords found that their biggest concern is their tenants falling into arrears, with 54% saying that this was a worry. Despite the various challenges in the rental sector, a quarter of them are still planning to expand their portfolio.
This may now be boosted further by the recent stamp duty holiday announcement, as although they have to pay the additional 3% they will still make savings on the total amount of stamp duty payable.
Miles Shipside, Rightmove’s commercial director, said: “The pause in the rental market has led to some distorted figures over the past few months, especially in cities where landlords with short-term lets made the swap to instead try and find a long-term tenant.
“Both rents outside London and demand being at a record high isn’t good news for many tenants looking to move right now, especially as we know there will be even more competition for those attractive properties with more space, bigger gardens and a spare room.
“There are early signs that some existing London renters are looking to move further afield, adding to the large increase in the number of properties up for rent on Rightmove in the capital, so prospective tenants there could find there’s some room to negotiate especially if they are happy to sign a longer-term contract than usual.
“Many renters may feel they’ve been left out of the chancellor’s recovery packages, but one glimmer of hope is that the temporary stamp duty savings may entice more investors to expand their portfolio. If this does happen we could see more choice for tenants and in turn prices may stabilise for a while, but it will take some time.”