Startling figures released this morning by Rightmove suggest that rents have risen 8.2 per cent in London in the past year - and they were up 2.9 per cent in the past three months alone.
The annual increase is the highest since Rightmove began recording the lettings sector prices back in 2012.
Specifically, asking rents in London are at an all-time high of £2,093 per month after a record year-on-year price increase. Rightmove says much of this is down to a shortage of stock.
The portal says demand is outstripping supply with the number of available rental properties in the capital down by 33 per cent compared with two years ago - across the rest of Britain on average the drop in 13 per cent.
“There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice” explains
Rightmove’s commercial director and housing market analyst Miles Shipside.
“But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over eight per cent higher than this time last year. Outside London, the pattern is not as extreme, but there is still a significant drop in fresh choice.”
Outside London, the North East is the only region to have seen a drop in rents over the past 12 months, slipping a modest 0.3 per cent. Scotland (up 6.7 per cent) has witnessed the biggest year-on-year rise in asking rents.
But it’s the South East which has the highest average asking rents outside of London, with the average rental home being £1,054 per month.
Shipside adds: “Suffice to say the government’s introduction of higher stamp duty on second homes purchases back in 2016 combined with other tax increases has resulted in an ongoing trend of decreasing activity from investors in the buy-to-let market. Consequently, we’re seeing the initial price drops being replaced by rapid price growth in some areas.”