Average advertised rents have reached new record highs across Britain as the supply of rental homes has fallen for the first time since 2022, according to Rightmove.

Outside London, the average advertised rent rose by 1.9% during the second quarter to a record £1,397 per calendar month, 2.3% higher than a year earlier. In London, rents increased by 2% over the quarter to a record £2,791 per month, the capital’s largest quarterly rise since 2023.

Rightmove said the number of rental properties available nationally is now 1% lower than a year ago, marking the first annual decline in supply since 2022. The reduction appears to be driven by fewer newly listed rental homes rather than faster lettings.

Despite tighter supply, competition between tenants remains well below the peak seen in 2022. The average rental property now receives 10 enquiries, compared with 11 a year ago and 22 at the height of the post-pandemic market, although demand remains above the pre-Covid average of five enquiries per property.

The portal said rental market conditions continue to vary across the country. Annual rent growth was strongest in the North East and North West, where rents increased by 4.1%, while London recorded the closest balance between supply and demand.

Rightmove also reported a modest fall in buy-to-let borrowing costs, with the average two-year fixed mortgage rate declining to 5.55%, down from 5.67% last month but above the 5.20% recorded a year ago.

Rightmove’s Colleen Babcock said: “We’re seeing new record average rents advertised in both London and Great Britain outside of the capital, however overall, we’re seeing rents return to more familiar seasonal patterns and stable growth.”

“Even though supply is no longer increasing, the market remains much more balanced than it was at the peak of competition in 2022. Regional trends also continue to vary significantly across the country, with more affordable northern areas still seeing some of the strongest rental growth.

“London has seen a notable increase in rents this quarter, and also the largest drop in available rental supply, underlining how local supply and demand dynamics continue to shape rental pricing.”