Asking rents are being reduced to attract tenants, with the number of homes having their asking rent reduced now residing at the same level as H2 2020, reveals new data from Zoopla.
A key sign of demand and the impetus for rental growth is how much asking rents are reduced to attract a tenant, says the company.
There are the most asking rent reductions in London, with 10% of listings reduced by 5% or more in November 2023.
The rest of the UK excluding London is at 7%, the highest for more than five years.
This is a sign that rents in some markets have been set too high, as renters show resistance to higher rents.
This news comes as a chronic mismatch between supply and demand has been the defining feature of the private rental market for three years.
UK rents for new lets have risen by a third — or £3,360 a year — in this time.
Zoopla thinks that rental growth has now peaked, and the company expects a major slowdown in 2024.
The company attributes this forecasted reduced rental demand to the current economic and financial climate.
Zoopla says that there are four main reasons for strong rental demand in the last 3 years.
But there are signs the combined impact of these factors is starting to plateau, as Zoopla’s rental index shows that demand has been steadily slowing in the second half of 2023.
The number of rental enquiries per home for rent is down year-on-year, after peaking in summer 2022.
