UK rental costs reach record high in August as supply falls, Rightmove says

Rental costs across Britain reached a record high in August as advertised average monthly payments climbed to £1,577, a 2.9% increase from a year earlier, property portal Rightmove said.

Rightmove reported that tenant demand has cooled but that a steep fall in available properties has pushed up asking rents, intensifying competition among prospective tenants for the smaller pool of homes on the market.

The portal cited a series of pressures that have driven landlords out of the buy‑to‑let sector over the past year, reducing supply. These include a second‑home surcharge on stamp duty introduced in last year’s Budget that added thousands of pounds to the cost of buying investment properties, and an impending regulatory requirement that landlords raise Energy Performance Certificate (EPC) ratings to at least a C band, which can require substantial expenditure to meet.

Mortgage costs for landlords have also been a factor. Rightmove noted that while mortgage rates have begun to fall slowly, they remain well above the ultra‑low levels seen a few years ago, and buy‑to‑let borrowers generally face higher lending rates than residential homeowners.

The combination of fewer properties for rent and continuing affordability pressure has pushed up advertised rents even as measures of tenant demand show signs of cooling. Rightmove’s data reflect asking rents advertised by landlords and agents, which can differ from agreed rents on completed tenancies.

Industry observers have said the stamp‑duty change and higher financing costs altered the economics of buy‑to‑let investing almost overnight, prompting some landlords to sell properties rather than continue renting them out. The additional cost of upgrading properties to meet the C‑band EPC requirement has intensified that trend for landlords of older properties, who face potentially significant retrofit bills.

The rise in advertised rents comes amid broader concerns about housing affordability, with both market and policy changes affecting supply. While mortgage rate cuts so far have been gradual, any further reduction in lending costs could influence landlord decisions over time; Rightmove’s analysis suggests the immediate driver for higher advertised rents is the sharp decline in supply rather than a surge in tenant demand.

Rightmove’s August figures add to a series of data points showing pressure on the private rented sector, and they follow months of upheaval as landlords reassess the viability of buy‑to‑let investments in the face of tax, regulatory and financing headwinds. The portal’s report did not provide detailed regional breakdowns in the summary released alongside the national average.

Policymakers and market participants will be watching whether supply constraints persist into the autumn and whether continued shifts in lending costs or further regulatory changes prompt additional exits from the rental market, with implications for tenants, landlords and the wider housing market.