Average advertised rents outside London have risen above £1,400 a month for the first time, the latest figures from Rightmove show.
The average asking rent reached a record £1,418 per calendar month in the third quarter, up by 1.5% on the previous quarter and by 2.4% annually.
In London, the average advertised rent reached a new high of £2,825 a month, with annual growth accelerating to 3.2%.
The number of homes available to rent outside London was 2% lower than a year ago, while renter demand also fell by 2%.
The capital is experiencing a greater imbalance between supply and demand, with the number of available rental homes down 9% year on year and new listings falling by 7%, while renter demand increased by 6%.
Rightmove says rents are generally rising more quickly in lower-priced areas of Britain.
But overall, annual rental growth remains well below the roughly 10% rates recorded between 2021 and 2023.
Rightmovel also found little evidence of a significant increase in landlords selling up.
Around 13% of homes listed for sale had previously been advertised to rent, broadly unchanged throughout this year and only slightly above the 12% recorded last year.
Higher borrowing costs are also making further investment less attractive. The average two-year fixed buy-to-let mortgage rate is now 5.34%, compared with 4.16% before the start of the war in Iran.
Rightmove mortgage expert Matt Smith says: “One of the biggest challenges for many landlords at the moment is managing the properties they already own when the time to remortgage comes around.
“New buy-to-let investment has been relatively subdued for some time, and some landlords are still reaching the end of much cheaper fixed-rate deals taken out when borrowing costs were lower.
“For those landlords, moving onto a higher mortgage rate can have a significant impact on monthly costs and rental yields.”
Association of Residential Letting Agents Propertymark president Kim Lidbury says: “The latest figures highlight why the rental market needs to be judged on more than the rate at which rents are rising.
“Although rental growth has moderated, advertised rents remain at record levels, and the availability of suitable homes continues to be a major concern for tenants.
“The cost and complexity of providing rental housing remain important considerations for landlords.
“Financing costs, taxation and regulatory requirements all influence decisions about whether to invest in, retain or sell rental property.
“These pressures can have wider implications for the availability and choice of homes for tenants.
She adds: “Ultimately, the priority is to ensure there are enough good-quality homes available to rent, at a range of price points, while maintaining a rental sector that works for both landlords and tenants.
“A slowdown in rental growth is welcome, but it will not, on its own, resolve the affordability challenges facing renters.”
