Rents Reduced on Over a Quarter of Listings: Rightmove Reveals Affordability Pressures

New data from Rightmove highlights a significant shift in the UK rental market, with over 26% of rental properties experiencing price reductions before securing tenants. This is up from 23% in the same period last year, reflecting growing affordability challenges for renters.

Despite the fact that rental properties are receiving an average of 11 enquiries each—nearly double the six enquiries seen pre-pandemic in 2019—tenants appear to be hitting financial limits.

Supply-Demand Balance Shifts

The winter season traditionally sees a quieter rental market, and current figures reveal a more balanced supply-demand dynamic compared to last year. The number of available rental properties has risen by 7%, while prospective tenant numbers have dropped by 19%.

This adjustment has contributed to a slowdown in rent growth, with average rents outside London now at £1,339 per calendar month—4.5% higher than last year, marking the slowest annual growth since 2021. In London, average rents have increased by just 2%.

Affordability Challenges

Over the past five years, rents have soared by 40%, far outpacing the 28% increase in average wages. This growing disparity between earnings and rent prices is forcing tenants to reconsider affordability, leading to more properties undergoing price reductions.

Tim Bannister, Rightmove’s property expert, explains:

“The ongoing supply-demand imbalance is still putting upward pressure on rents. However, affordability constraints are becoming more evident, as reflected in the rise in price reductions.”

Agents remain busy, fielding high volumes of enquiries, even as the market cools slightly from the frenetic pace seen during the summer, where properties averaged 19 enquiries each.

Future Projections

Rightmove anticipates a steadier rental market in 2024, predicting newly advertised rents to rise by around 3% both inside and outside London. While supply challenges persist, affordability concerns are expected to keep rent increases more moderate than in previous years.

As the rental market evolves, both tenants and landlords will need to navigate these competing factors carefully, balancing demand with realistic affordability thresholds.

While some areas in the UK are experiencing a slight slowdown in enquiry levels and a modest increase in price reductions, the Edinburgh and Lothians rental market remains robust. Demand for rental properties in the region continues to be strong, particularly for well-maintained homes in desirable locations.

In the last quarter of 2024, we’ve observed a stabilisation in rental growth, which is a positive sign for both landlords and tenants. The slight increase in available properties has eased some of the competitive pressures, yet enquiry levels remain above pre-pandemic averages, showcasing the region’s enduring appeal.

Looking ahead to 2025, we anticipate steady growth in rental values, underpinned by a continued imbalance between supply and demand. With Edinburgh and the Lothians offering excellent connectivity, amenities, and quality of life, the market is well-positioned to attract both domestic and international tenants.

Landlords can feel confident about the prospects for their investments, while tenants may benefit from a more balanced market, creating opportunities for longer-term stability and security.