Landlords Urged to Tread Carefully with Rent Prices in 2024

Landlords will face the task of carefully setting rent prices in 2024, balancing various priorities, according to predictions from Rightmove. The platform noted an increase in rental properties undergoing a reduction in asking rent towards the end of 2023, with 23% of properties seeing a decrease in advertised rent, up from 16% in the previous year.

Rightmove highlighted the financial strain on renters, with an average single renter spending 51% of their income on rent, a rise from 49% last year and 46% in 2019. This increasing pressure on rental affordability, coupled with more renters hitting their affordability limits, suggests that landlords will need to find a balance between covering their mortgage costs and securing reliable tenants who can afford the rent in their local area.

Christian Balshen, Rightmove’s lettings expert, commented on the situation: “Landlords have always prioritised finding a good, reliable tenant for their home alongside the reality of having to pay the mortgage each month. Higher mortgage rates have had a knock-on effect for renters this year, as landlords who have faced these higher rates and therefore higher monthly costs, have needed, in some cases, to pass these on to tenants to some extent. Many tenants will have a cap on what they can or are prepared to pay in rent, and an increasing number of landlords are having to reduce their advertised rent, suggesting more are reaching this cap.”

Balshen emphasized the importance of landlords working closely with local letting agents in 2024, who can provide expertise on the dynamics of the local market to help landlords set appropriate rents and find suitable tenants.

The report concluded with Rightmove’s projection that average advertised rents, which ended 10% higher in 2023 outside of London and 6% higher in the capital, could see an increase of 5% by the end of 2024 outside London, and a 3% rise within London.