London rents rise again as house prices hold: ‘It is nothing short of brutal’
Rents in London have continued to show double-digits rises despite a stablisation in the housing market and lower mortgage rates.
Average UK private rents increased by 9.1 per cent in the 12 months to November 2024, with rents in London up 11.6 per cent, according to the latest ONS figures.
Propertymark chief Nathan Emerson called the market “challenging” due to ever-increasing demand and said it was “essential” that the government support long-term investment in rental properties to balance the market.
The managing director at Coreco, Andrew Montlake, went further and said that renting was “nothing short of brutal”.
“Something has to give… rents are rising at an astronomical and unsustainable rate,” he said. “In many cases, landlords have no choice but to increase rents as they are in an impossible position as a result of higher mortgage rates and an ever more punitive tax regime.”
Emma Jones, head of When The Bank Says No, said: “Tenants are in an extremely tough place and have been for a long time. This data highlights exactly how tough.
“The challenge of saving for a deposit to get on the ladder while paying sky-high rents is phenomenal. In London, affordability is almost non-existent.”
House prices hold steady
The average UK house price increased by 3.4 per cent to £292,000 in the 12 months to October 2024, according to the ONS.
The change was smallest in London, with the average cost of a home up just 0.2 per cent year on year.
Head of sales at estate agency Antony Roberts, Amy Reynolds, said the stabilisation in the market could “be the nudge buyers need to act in the new year”.
“Transaction levels remain subdued compared to pre-pandemic norms, as high borrowing costs and stamp duty continue to weigh heavy on the market. We are noticing a growing divide between well-priced homes, which are selling without difficulty and overpriced ones, which are stagnating on the market.
“However, a fresh new year and hopefully the return of sub-4 per cent mortgage rates early in 2025 should restore buyer confidence and could boost transactions throughout the year,” Reynolds said.
Director of specialist lender MT Finance, Tom Aboody, agreed that rate cuts had boosted affordability and “brought more sellers back into the fold”. However, he warned that we are “yet to see the full impact” of the Budget.
The ONS figures cover in particular the period leading up to the Budget, when many were trying to complete transactions before anticipated tax rises.
Overall, analysts and estate agents were largely positive about the housing market in 2025, with only some caveats on the budget and the potential impact of the change in stamp duty for second homes and first-time buyers.
Propertymark chief Nathan Emerson said: “Looking at the entire year in view and against a backdrop of challenging economic conditions and political change, it is hugely encouraging to witness such a strong year of overall growth within the housing market.”