Demand for London rental property has dropped 28 per cent in London, reports Zoopla, while supply is up 23 per cent.
London rents are still up 3.7 per cent over the last 12 months, but down from a high of 13 per cent this time last year.
Rents in the capital have fallen 0.3 per cent over the past three months, with the average rental home currently costing £2,122.
London still has exceptionally high rent, with tenants spending 41 per cent of their gross earnings on housing.
“In London, the growing unaffordability of renting is starting to act as a drag on rental growth,” said Zoopla.
“The growing unaffordability of renting is starting to act as a drag on rental growth.”
But demand is falling as mortgages falling to the 5 per cent range allows more first-time buyers to escape the rental trap.
“A key reason for demand appearing to level out is that aspiring homebuyers, who delayed their property search amid economic and political uncertainty and chose to rent in the meantime, have now resumed their search,” Adam Jennings, head of lettings at Chestertons told Homes & Property.
“As a result, we have seen more rental properties become available which is good news for tenants currently wanting to move.”
“We have seen more rental properties become available which is good news for tenants currently wanting to move.”
Demand for rental homes is still higher than it was pre-pandemic, but slightly less frenetic as first-time buyers exit the market. Zoopla estimated that there are still 15 people competing for each rental property.
“The increase in the cost of renting has slowed to a 30-month low,” said Richard Donnell, executive director at Zoopla.
“Rents continue to grow faster than average earnings although the gap is much narrower than a year ago. Rental demand continues to run well ahead of available supply which is keeping the upward pressure on rents but there are some areas where rental growth has stalled.”
Rental growth across the wider UK is also slowing, but not at the same rate as London. Rents rose 6.6 per cent year-to-date, with the average UK monthly rent now sitting at £1,226 per month.Donnell added that the next Government needed to focus on the UK rental crisis as a matter of urgency.
“The number of private rented homes has been static since 2016 which has compounded the rise in rents over the last 3 years,” he said.
“Growing the supply of rented homes, both private and affordable, should be among the top housing priorities for the next Government.”
