Rent prices hit an all-time high in London in December, due
to a worrying lack of supply of rental properties, according to the latest data
Figures from the property portal for the period from October
to December show that rental listings dropped by 22% on an annual basis in
London, and have fallen by 10% outside of the capital.
This lack of supply has pushed the average asking rent up by
2.7% year-on-year, although it has declined by 0.6% on a quarterly basis, to
£798 per month.
In London, the average asking rent hit an all-time high in
December, of £2,034 a month, which follows annual growth of 5.4% and a
quarterly increase of 2.1%.
Rightmove predicts that asking rents will rise by 3% outside
of the capital this year and 4% in London.
Up to the end of 2018, Hertford recorded the greatest
increase in tenant demand outside of London, while East Ham saw the biggest
rise in the capital.
This widening supply-demand imbalance has led to a lack of
choice for tenants, leading to the new all-time high rent prices, which surpass
the peak seen in 2016.
The Commercial Director and Housing Market Analyst at Rightmove, Miles
Shipside, says: “The
increasing rents in London reflect that demand has been exceeding supply over
the past year.
Government introduced higher Stamp Duty on second home
purchases back in 2016, it deterred many landlords from investing in the
buy-to-let market, which, in turn, has exacerbated this ongoing dearth of
available properties, and we’re yet to see any significant boost in stock from
the many build to rent programmes. In addition, the more punitive treatment of tax reliefs has meant some
landlords are also exiting.”
of London, it is parts of the North West that have experienced the greatest
increases in tenant demand, with six towns from the region making the top ten
five comprises Hertford, Bootle, Bracknell, Winsford and Prenton.
capital, east London dominated the top five: East Ham, Forest Gate, Biggin
Hill, Elephant and Castle, and Chadwell Heath.
Notting Hill, Hammersmith, Canary Wharf and Highgate all featured in the top
five London areas where the average asking rent has increased the most, with
Newbury, Swansea, Dundee, Dudley and Hinckley being the spots where rent prices
rose the most across the rest of the country.
believes: “We forecast that average asking rents will continue to slowly
strengthen further in 2019, by perhaps 3% outside London. In the capital, there
are no signs of an increase in buy-to-let activity, which may lead to asking
rents growing further by around 4%.
mutually beneficial plan for both buy-to-let landlords and tenants is to strike
up a genuine rapport. It eases landlords’ concerns if they have a tenant in
situ for several years, while a tenant with a good relationship with their
landlord will stand a better chance of negotiating more favourable rents.”