London rents forecast to rise at a slower pace than inflation in 2024 | Business News

Rent rises are expected to half next year as asking prices for new rental properties have fallen, according to property website Zoopla.

Rents across the UK will increase by 5% to December 2024, Zoopla’s rental market report has said, nearly half the 9.7% rate of rises seen in the last year to October as the cost of living crisis affects people’s ability to pay more.

It’s the latest indication that rent rises have peaked, as rental growth drops from the 11.9% rises recorded in the year to 2022.

The forecast 5% increase would be the smallest in roughly three years. Not since September 2021 have rents grown at such a relatively slow pace.

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It comes as asking prices for new rental units have fallen with Zoopla noting a spike in properties coming onto the market.

Listing prices dropped more than 5% for one in ten rental properties on the market.

Nationwide, 7% of rent listings knocked 5% off.

The capital has experienced the greatest rent pressures – with increases of 17% last year – but will only book rent growth of 2% next year, Zoopla said, less than the expected pace of inflation.

The rate of price rises will fall to 3% by October, the Bank of England has estimated.

The greatest slowdown in rent growth is expected to be in the £1,000 – £1,500 per month bracket.

The latest data from the ONS showed there was no “clear pattern” that private rents had increased faster than the income of renters since 2013.

Official figures showed average basic wages grew 7.8% during the three months to August, compared to a year earlier, while inflation stood at 6.7% in the 12 months to September.

At roughly the same period – up to August – the ONS said rents rose 5.5%.

But over the past three years rents had continually risen, up by almost a third (31%), according to Zoopla figures.

The average UK rent currently stood at £1,201 per month in October, the Zoopla data said, with the highest rents in London at £2,049 a month, Oxford (£1,611 a month) and Bristol (£1,565 a month).