Rents in London hit record highs as rest of country follows suit

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According to Britain’s biggest online property site, Rightmove, rents in Ondon have now reached a new record average price of £2,257 per month in the quarter.

Average asking rents outside London also hit a new record high of £1,126 per calendar month, up 3.5% from last quarter and 11.8% from a year ago.

This rise in average asking rents means rents outside of London are rising at the highest annual rate Rightmove has recorded in 16 years of reporting. Rents are now up 19% (up £177) since the pandemic began two years ago.

In contrast, the rise has been staggering as it took eight years before the pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the pandemic. The 3.5% jump this quarter is the second highest quarterly increase in ten years.

Richard Davies, Managing Director of Chestertons, said: “Throughout the second quarter of this year, the London rental market has seen continued growth in tenant inquiries as well as in the number of tenants extending their tenancy contracts.

“Those who have secured a property at a reduced rental rate during the pandemic are keen to keep this deal as long as possible, especially in the face of the rising cost of living.

“This has created an extremely competitive market for tenants where many are offering landlords a higher than asking price in order to secure a property.”

Rising rents continue to be driven by a shortage of available rental stock, with low volumes struggling to meet strong tenant demand over the past two years, according to Rightmove.

Rightmove’s Director of Property Science, Tim Bannister, said: ‘The rental market story continues to be one of strong tenant demand, but not enough housing available to meet that demand. Last year we saw an exceptional number of tenants looking to move and this year we have seen no letting up in that trend.

He added: “Although there is still a shortage of accommodation available to rent, there continue to be signs of improvement. The number of new rental ads is up 8% since the start of the year. June saw the highest number of new rental listings hitting the market of any month this year so far.

Despite these encouraging signs, the available rental stock is still down 26% from last year’s levels, while demand is up 6%, meaning competition among tenants remains extremely fierce.

Rightmove said it now expects average asking rent growth to reach 8% by the end of the year, up from 5% forecast at the start of the year.

Toya J. Bell