Demand for rental properties stabilised in July following a strong rebound in the first two months after the Renters’ Rights Act came into force, according to Chestertons’ latest data.
The figures come as new data from Rightmove shows that asking rents in London are now rising faster than in the rest of Great Britain for the first time in almost three years.
Portal enquiries, often the first indicator of tenant demand, fell by 7% year-on-year in July, following increases of 17% in May and 10% in June, the first two months after the introduction of the Renters’ Rights Act.
The shift follows five consecutive months of declining portal enquiries before the legislation came into effect, suggesting the market is beginning to settle after an initial burst of activity.
As Chestertons highlighted in its June Lettings Report, one unintended consequence of the Act may have been landlords increasing asking rents to test the market. This is because legislation prevents landlords from accepting offers above the advertised rent.
In May, the first month under the new rules, the number of landlords reducing asking rents fell sharply, down 36% year-on-year, after several months in which a growing proportion had lowered rents.
Although June saw a partial reversal, with rent reductions increasing by 6% year-on-year, July recorded an increase of just 1%, indicating that landlords are becoming more confident in their initial pricing.
Katinka Hill, Head of Lettings at Chestertons, said: “Activity seen immediately after the legislation was introduced in May eased off in July, however during the first ten days of August our branches have seen applicant registrations go up by 18% year-on-year. This is in line with the seasonal summer uptick we would expect this time of year.”
The latest Rightmove Rental Trends Tracker provides further evidence of rising rents across the capital. Asking rents increased by 2.9% year-on-year in the second quarter, up from 1.4% in Q1 and marking the strongest rate of growth in two years. London's rental growth also outpaced the rest of Great Britain (+2.3%) for the first time since Q3 2023.