The average price of a two-bedroom London rental property will reach £2,000 per month by the late summer, according to Portico, London estate agents.
The firm’s latest Q1 Rental Report found that the typical rent price on a two-bed property in the capital is currently £1,867. With rents rising rapidly, it is expected that tenants will be paying over £2,000 for the same property by September.
Portico believes that a rush of graduates seeking professional jobs and a new lifestyle in London around September time drives rent price growth. And it’s not just prices that rise – tenant demand surges by a huge 64% in September, as available rental stock drops by 10% when compared with average monthly growth.
Average Two-bed London Rental Property to Reach £2,000 Per Month by September
Portico sees almost double the number of enquiries per property in September than it does in an average month, and four times the level of interest compared with the typical December.
The particularly high demand seen in the late summer causes tenants to compete more fiercely for properties. Portico reports that prices achieved for similar properties are generally 11% higher in September than in December.
Based on this data, the firm predicts that two-bed rents will hit £2,008 per month in September this year. Split between two tenants – £1,004 a month – this shared rent will eat up 46% of the average London monthly salary.
Confirming this belief, the Residential Landlords Association recently revealed that almost all landlords (84%) are considering increasing their rents to accommodate the higher taxes they now face.
Buy-to-let landlords are now charged an extra 3% in Stamp Duty when they purchase a rental property, while the amount of mortgage interest that landlords can offset against tax will be reduced from April next year. For more information on how these changes will affect you, see this advice from Paul Mahoney of Nova Financial: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/
However, if you’re a landlord in London, you’ll be pleased to learn that rents are rising between 1-7% in the majority of London boroughs.
Portico has found that properties in Ealing have seen the greatest increase in rents, at an average of 6.9% for a two-bed property, to £1,825 per month. Richmond-upon-Thames follows with a rise of 6% to £1,934 a month for a typical two-bed, while rents in Lambeth are up by 5.8% to £2,051.
However, average rents on two-bed properties have fallen in seven London boroughs, including two parts of prime central London. Rent prices in Westminster and Kensington and Chelsea are down by 5.7% and 1.1% respectively. These figures reflect those reported recently, suggesting that the London property market is running out of steam.
During Q1, Bromley experienced the largest decrease in rents for all properties, with a drop of 6.3%, followed by Hillingdon at 4.4% and Kingston-upon-Thames at 4.1%.
If you are worried that you need to revise your rent prices, this advice will help you set the perfect rent for your property: https://www.justlandlords.co.uk/news/setting-perfect-rent-price-property/