Rents have risen to a new record of £1,280 a month, although the pace of growth has slowed.
According to Rightmove, rents have increased by just 0.2 per cent in the last quarter, the smallest jump since 2019.
Despite this, advertised rents are still 9.2 per cent higher than last year.
London rents also hit a new record level of £2,631 a month, rising by 0.2 per cent this quarter.
Rightmove predicts that average rents will rise by five per cent outside of London in 2024 and three per cent in London.
The property portal noted that the trend of improving supply and lower tenant demand is continuing.
The number of tenants sending enquiries to letting agents to move is 13 per cent lower than the same period last year, for example.
But supply is up, with the number of new rental properties coming onto the market seven per cent higher than last year.
Agents are still receiving 11 enquiries for each rental property on average, down from 14 last year, but way up on the four recorded in 2019.
There are signs that more tenants are hitting an ‘affordability ceiling’, with nearly a quarter (23 per cent) of rental properties needing a reduction in advertised rent, compared with 16 per cent at this time last year.
This is further contributing to slowing rent rises, said Rightmove.
The portal’s director of property science, Tim Bannister, said: “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, and 2024 is the year we think there will be a much smaller increase in advertised rents of five per cent outside of London, and thee per cent in the capital.”
Hayley Brinn, director at The Total Letting Service, added: “The market is still really busy, and the high number of applicants per property is being exacerbated by some landlords leaving the market.
“Prices appear to be levelling out now as more choice becomes available, with tenants becoming more price sensitive, or just reaching the maximum of what they can afford to pay.”