According to Rightmove’s rental trends tracker, this is the second largest year on record for rent growth behind 2021.
However, the report added that the pace of rent growth was easing, with the Q4 increases coming to 0.9 per cent, which compares to 3.2 per cent in the prior quarter and is the smallest quarterly increase for two years.
Average asking rent in London also reached a new high of £2,480 per calendar month, an increase of around 16 per cent year on year.
Inner London rents have also surpassed £3,000 per month for the first time, which is also up nearly 17 per cent compared to the same period last year.
‘Positive signs’ that rental competition starting to ease
The report continued that the competition for available properties was starting to ease, with the number of available properties to rent in December up 13 per cent on the same period last year.
New properties coming up for rent increased five per cent year on year in December and the number of tenants looking for a property to rent was seven per cent up on the same period.
Competition between tenants fell six per cent year on year and by a third compared to September, when the supply demand gap was at a record high.
The report warned that despite “positive signs”, demand was still high, and number of properties to rent was still down by 38 per cent compared to 2019.
The number of people enquiring about a property was 53 per cent up on the pre-pandemic period.
Rightmove said that average asking rents for newly-available properties would increase by around five per cent this year.
Rightmove: ‘Pace of annual growth will ease’
Rightmove’s director of property science Tim Bannister said: “Although the fierce competition among tenants to find a home is starting to ease, it is still double the level it was back in 2019. Letting agents are seeing extremely high volumes of tenant enquiries and dealing with tens of potential tenants for each available property.
“Landlords will need to balance any rent rises with what tenants can afford to pay in their local area, to continue to find tenants quickly and avoid any periods where their home is empty due to tenants not being able to meet the asking rent.”
He continued: “There appears to be some more property choice for renters compared to the record low levels of last year which would slightly ease the fierce competition to secure a home. This is why we’re forecasting that the pace of annual growth will ease to around five per cent by the end of the year nationally, although this would still significantly exceed the average of two per cent that we saw during the five years before the pandemic.”
