Rent crisis eases as first-timers buy houses

BRITAIN’S rental crisis is easing as falling mortgage rates help more first-time buyers on to the housing ladder and take pressure off the lettings market.

Rents across the UK increased by just 0.2pc in the final three months of 2023, marking the slowest growth since 2021, according to online property portal Rightmove. When London rents were excluded, prices rose at the slowest quarterly pace since 2019.

Growth is slowing after a year of surging rents, which have pushed the cost of renting to all-time highs. Average rents outside London now stand at £1,280 per month. Tim Bannister, director of property science at Rightmove, said: “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.”

Rental growth is also slowing as falling interest rates help more firsttime buyers on to the housing ladder, lessening demand for rental properties. Mortgage rates hit record highs last year but have fallen since the beginning of the year, with several lenders now offering rates of below 4pc.

More properties are also coming to market as people put off sales because of depressed valuations, instead opting to become “accidental landlords”.

Guy Gittins, chief executive of Foxtons, said: “Letting supply and demand has largely normalised. Rents will stay elevated but there is much more stock available now, around 30pc more, so we won’t see huge price increases.”

The average number of people asking to see a room for rent has fallen from 14 last year to 11, Rightmove said. This remains above the 2019 average of four.

Rents are expected to continue to increase but at a more moderate level, by 5pc outside London and 3pc in London, Rightmove said. That compares to growth of 9.2pc over the past 12 months.