Private rents in London are growing at an unprecedented pace, increasing by 14% in a year, making it the most competitive market to date
Rents in the capital currently average £2,193 per month, up from £1,919 the previous year. The increase in rental is one of the most profitable for homeowners in the capital. According to Rightmove, UK’s largest online real estate portal and property website, this is the largest yearly increase in any area ever recorded.
Statistics from the flat-sharing website SpareRoom, the capital’s red-hot rental market has resulted in price increases throughout the city, with the West End witnessing a 34% increase over last year. In Chelsea there has been a growth of 28%; and 27% in South Kensington, where the average monthly rent currently stands at £1,384.
Outside of Greater London Area, the average annual increase surpassed 10% for the first time ever, pushing the average rent to a new high of £1,088 per month, up from £982 the year before in areas like Manchester and Swansea, which are both popular rental hubs.
“Rents are rising throughout the nation and have already reached record highs in the majority of towns and cities.” — Matt Hutchinson, SpareRoom director
While the rising prices may be stressing news for renters, it is a gold mine for home owners. Boosting the rental prices and the cost of living is a strong indicator of a growing economy.
London is still dealing with a significant lack of supply as a result of fewer houses coming onto the market and a rush returning to the metropolis after the epidemic. According to Rightmove, demand has increased by 8% while available rental units have decreased by 47%. Tenants outnumber available homes by three to one as a consequence of this continued mismatch, with Rightmove describing it as “the most competitive rental market ever recorded.”
This is a significant change from the beginning of the epidemic, when younger tenants moved back home with their parents, filling the market with properties and forcing rents to fall. Since then, London reacted ferociously towards the end of last year, igniting a flat-viewing frenzy, with estate agents organizing block viewings for each property and bidding battles becoming frequent.
The number of new rental properties on the market increased by 5% in March compared to January, and by 16% compared to the shorter month of February.
“In the first three months of this year, we’ve seen tenant demand surpass the high levels established last year, which, when combined with fewer available properties for rent, has resulted in the most competitive rental market we’ve ever recorded,” said Tim Bannister, director of property data at Rightmove. “On the supply side, we’re hearing from brokers and landlords that tenants are signing lengthier leases, which has kept some property from returning to the market.”
For those looking to move away from the thriving London property market, it seems like prices are also soaring throughout the UK. Swansea, in South Wales, topped Rightmove’s chart of rental hotspots, with a 19% increase in normal asking rates, closely followed by Manchester, also with a 19% increase. Other hotspots were Margate in Kent (18%), Grantham in Lincolnshire (14%), and Cardiff (14%).