London rental prices clock biggest monthly bump since records began
London saw a record increase in private rental prices in September, according to the latest government figures, as high mortgage rates put pressure on landlords.
Data released by the Office for National Statistics (ONS) on Wednesday showed rental prices in London increased by 6.2 per cent in the year to September, up from 5.9 per cent in August.
This figure marks the highest increase of any UK region and the biggest jump since the London data series began in 2006.
Meanwhile, the average number of enquiries for each UK property has more than tripled to 25 from eight over the last four years, according to Rightmove.
Private rental prices in London make up nearly a third of the country’s rental expenditure, with lodgers in the city seeing costs reach fresh highs this year.
London is experiencing a decreasing supply of homes available to let, which has enabled many landlords to hike their rent and desperate tenants to overbid on homes.
Lettings platform Goodlord found last month that nearly half of UK landlords had tried to sell their property in the last year, with more than three quarters of respondents in London citing high mortgage payments as a reson to exit the housing market.
Greg Tsuman, a director at north London estate agent Martyn Gerrard, said the private rental market is nearing an “implosion” and called on the government to review changes earlier this year that put higher taxes on landlords.
“Lack of supply has been weighing heavily on the market, with affordable two-bedroom properties attracting as many as 80 enquiries from desperate tenants,” he added. “The situation is pushing renters to move to more affordable areas, creating a ripple effect on prices as people leave urban centres for the suburbs. Trends in the city are reverberating outwards.”
“Our agents report that more and more tenants are falling into arrears, but without government intervention to incentivise investment, this is going to worsen,” said Nathan Emerson, chief executive of Propertymark.
“Governments across the UK need to urgently address the underpinning reason for these issues which is undersupply and must now look to adequately incentivise landlords to provide desperately needed homes in the private rented sector.”
Across the UK, private rental prices rose by 5.7 per cent in the year to September, up from 5.6 per cent in August and the largest annual increase since the ONS began recording nationwide data in 2016.
“The rental market is in a hugely challenging place right now,” said Sophie Pollard, director of estate and lettings agency MyHaus Brighton.
“In time, although it’s likely happening already, this will have an effect on standards as landlords rely on rental income to make repairs and maintain properties for their tenants.”