Landlords are raising rents at the fastest pace since 2008, as demand for housing in London rises

Tuesday, November 16, 2021 at 8:48

Private sector rents in September were 4.6 per cent higher than a year earlier at GBP 968 per share. month on average, which is the strongest growth in 13 years.

The fastest rise since 2008 comes as strong demand surpasses supply, according to an index.

Except for London, rents across the UK rose by 6 per cent annually, a figure that Zoopla said was the highest in 14 years.

But rents in London are now also starting to rise as people return to offices, with annual price growth of 1.6 per cent in the latest report, compared with declines of almost 10 per cent at the start of the year.

Rents in the south-west of England rose by 9 per cent annually, making it the region to record the fastest rental growth in the third quarter of 2021.

And rents in Purbeck in Dorset rose by 16.2 per cent annually, making it the place with the highest rent growth.

Zoopla said demand continues to outpace supply and puts upward pressure on rents.

Rental growth is also due in part to the popularity of properties in higher price ranges, reflecting an ongoing search for space during the coronavirus pandemic.

Annual rental rates were 2.7 per cent in Scotland (average £ 627 per month), 5.8 per cent in Northern Ireland (typically £ 633 per month) and 7.7 per cent in Wales (£ 660 per month) .

Grainne Gilmore, head of research at Zoopla, said: “The decline in demand for city centers, including London, has supported a further increase in rents in the third quarter, especially as the supply of rental properties remains tight.”

She added: “Meanwhile, just like in the sales market, there is still a cohort of tenants looking for properties that offer more space or a more rural or coastal location.”

Response

Commenting on the results, Richard Davies, Head of Lettings at Chestertons, said: “This continued increase in demand, particularly in Prime Central London, is greatly affecting the supply of vacant properties for rent in the capital.”

“This has meant that rents have risen sharply, and tenants now have a much more limited choice than they had last year. On average, they are only able to see one or two properties that meet their criteria, which is very different from a year ago, when they could see at least five, ”he said.

“With demand exceeding supply, landlords are currently in a strong position and those who have been considering selling their property may be persuaded to keep it as a rental investment as the rental yield now rises,” Davies concluded.

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