According to a new research, average asking rents in London rose to an all-time high of £2,091 a month in the first quarter of the year. This happened because of the sharp drop of available property number. Several online portals including Rightmove, Gumtree, Zoopla reported increase in asking rents with further growth predicted this year. After a few years of slowing and dropping rents in the capital, asking rents in London are now up 8.2% on Q1 last year. These property websites show that rental stock in the capital dropped an average of 33% in just two years, prompting the rise of rent sharply. Housing supply in the PRS outside London is down 13% over the corresponding period.
This research also found that South East has the highest average asking rents outside of London. The average rental home here is £1,054 per month right now. The ban on tenant fees comes into force in England on 1st June this year. So there will be tenant fee to pay while renting a property. Several online property websites calculated that the expensive properties rent in London will increase to an average of £2,415 per property. The cheapest one here will be more than £1215 per property. Moreover, it remains to be seen if the ban will be passed on in other ways such as increasing rents more. Also, tenants will still need to find a pretty hefty rental deposit in many areas.
The rent will keep increasing in London and surrounding areas in the future as long there is no fresh supply of rental properties. In addition, the banning of tenant fee may also lead landlords to increase the rent of their properties. It’s a good time for some investors to consider buying up properties to let out as the tenant demand is very high.