Advertised rents outside of London hit a 16th consecutive new record average of £1,280 per calendar month, data from Rightmove shows.
But the property website says this quarter’s jump of 0.2% is the smallest since 2019 as the pace of rent growth slows.
Rents are now 9.2% higher than last year – the lowest annual growth in rents since 2021.
In London, rents also hit a new record, lifting 0.2% to £2,631 per calendar month.
But the study adds that the annual rise of rents in the capital has halved to 6% from 12% last quarter.
This is the first time rent increases in London have been in single digits compared to a year ago since 2021.
The report says: “Early signs indicate that the annual pace of rent growth will slow further in 2024, and Rightmove predicts rents to be 5% higher outside of London by the end of 2024, and 3% in London.
“One of the main contributors to the slowing of rent rises, and the anticipation of a further slowdown in 2024, is an improvement in the balance of supply and demand in the rental market.”
It adds that the trend of supply improving and tenant demand easing has continued at the start of 2024.
The number of tenants sending enquiries to letting agents to move is 13% lower than the same period last year, while the number of new rental properties coming onto the market is 7% higher than last year.
The survey points out: “There are also signs that more tenants are beginning to hit an affordability ceiling, further contributing to slowing rent rises.”
It says 23% of rental properties have cut advertised rent by the landlord, up from 16% a year ago, “suggesting the initial advertised rental price in some areas is increasingly out of reach for some tenants”.
Rightmove director of property science Tim Bannister says: “The trend of rent growth gradually slowing continues, with an improvement in the supply and demand of rental properties having a big contribution to that.
“We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up.”
Propertymark chief executive Nathan Emerson adds: “It is encouraging to see a firm flow of new rental properties coming onto the market, and Propertymark would like to see that trend continue across the year.
“Propertymark hopes that the government will use the new year as an opportunity to further stimulate growth in the rental market by encouraging a cut in interest rates, reducing mortgage costs and taxes, and provide further incentives to landlords to invest in the private rental market.”
