London’s dizzying private rents have smashed a new set of records hitting £2,343 per month in the quarter, according to online property site Rightmove.
The price of a rental has soared by 16 per cent from the same period last year, when average asking prices were at £2,019. It marks the highest yearly rate of growth of any region on record, according to Rightmove’s Rental Trends Tracker.
The new London average is 3.8 per cent higher than the previous quarter between May to July, when asking prices hit £2,253. Rightmove’s breakdown shows that in outer London, rents have risen annually by 12 per cent to average asking prices of £2,001.
However inner London has seen a 19 per cent increase in asking prices on last year, with the average asking price now £2,800 per month.
This chimes with recent data from Savills, which shows that, between January 1 and the end of September this year, rents grew by 13.7 per cent across prime London districts – the steepest increase since the firm’s records began in 1979.
Outside of London, average asking rents have also hit another new record of £1,162 per calendar month rising 3.2 per cent from last quarter and up 11 per cent compared to last year.
The research into renting trends also revealed how as tenants are pummelled on all sides by rising rents, higher energy bills and groceries, more are looking to downsize in a bid to bring costs down.
Rightmove said studio flats have now overtaken one-bed flats with competition 70 per cent higher than it was last year.
The extraordinary pace of rent rises is down to the ongoing shortage of available rental properties, combined with extremely high demand which continues to surpass even last year’s levels in every region.
Tim Hassell, Director at Draker Lettings in London said: “Within a few hours of a property going live, we are receiving dozens of enquiries which, when compared to the pre Covid market, is extreme. Previously we would receive between 5-10 enquiries in the first 48 hours and now we are receiving 30-40 in the same time frame.
“This has also resulted in multiple offers from tenants who are competing by paying over the asking price and offering significant funds up front.”
In London, Rightmove said the number of new properties becoming available to rent is down by 24 per cent on last year, while every other region and country in Great Britain has seen a jump in new properties to rent, most significantly in the South West (+19%), Yorkshire & The Humber (+12%) and Wales (+10%).
However, rising mortgage rates means those looking to get on the property ladder are looking at even paying even more than private renters.
According to Rightmove, the average monthly mortgage payment for a new first-time buyer putting down a 10 per cent deposit is now a fifth more than the rental payment for the equivalent type of property - £1,121 pcm for the mortgage payment compared with £932 pcm to rent.
The company said that a knock-on effect of the rise in mortgage interest rates could be more renters deciding to wait it out, in turn putting added pressure on the demand for flats and smaller properties to rent.
Rightmove’s Director of Property Science Tim Bannister said: “We will need a significant addition of homes to come onto the market to even begin to balance the scales.
“Those looking to rent a smaller property in the next few months may find that they face some added competition from would-be first-time buyers, who have had their purchase plans scuppered for now due to the sudden rise in mortgage interest rates, and are now looking to rent.”
