The typical rent in London now accounts for 60 per cent of the average wage according to Sequence - but even so, the increase in demand over the past year is nine times the increase in supply.
The latest Sequence survey of the market shows that demand to rent across the UK has reached record highs, with six prospective tenants competing for every available rental property. This has caused rents to rise four per cent annually and now accounts for more than a third of the average UK salary.
The rental market in London is much more active with close to seven tenants chasing every available property, says Sequence. Demand to rent in London is rising at more than nine times the rate of supply pushing average rents to a four year high of £1,515 per month, up 10 per cent annually.
Applications for buy-to-let mortgages - which are not subject to the same level of MMR restrictions as owner-occupier mortgages - have reached the highest level in 2014, increasing by 14 per cent in the year to June.
Contrary to the national picture, supply of homes to let in the capital has increased by three per cent since May alone and five per cent over the past year.
But demand has increased at a greater rate, rising 43 per cent over the year, says Sequence.
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Comments
An average price of 1,515 per month is very high for the many average income people who live and work in London. Only a matter of time before they decide what they are getting is not worth what they are paying and move further and further out. We've already seen reports of London property prices stabilizing, and I think this will be the cause!