A lettings market snapshot from Rightmove suggests asking rents in London are now increasing at an annual rate not seen for four years.
Compared with this time last year, available rental stock in London is down 22 per cent, accelerating the upward trend.
The drop in buy to let activity and increased demand from tenants has led to a lack of choice for tenants and rents rising to a new record of £2,034 per month in the capital, passing previous highs.
“The increasing rents in London reflect that demand has been exceeding supply over the past year. When the 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” says Miles Shipside, the portal’s housing market analyst and commercial director.
Nationally outside London, there are 10 per cent fewer rental properties marked available compared to this time last year.
Outside London, it’s places in the North West that have seen the biggest increase in tenant demand, with six towns from the region making the top ten this year. The top five include Hertford, Bootle, Bracknell, Winsford and Prenton. In the capital, East London dominates the top five, which comprised East Ham, Forest Gate, Biggin Hill, Elephant and Castle and Chadwell Heath.
Hayes, Notting Hill, Hammersmith, Canary Wharf and Highgate made it into the top five London areas where asking rents have increased the most, with Newbury, Swansea, Dundee, Dudley and Hinckley being the spots where asking rents have risen the most across the rest of Great Britain.
Rightmove predicts that asking rents will rise by three per cent outside London, and four per cent in London in 2019.
“A 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.”