London rents see biggest jump on record amid landlord exodus
Private rental prices in London saw their biggest jump since 2006 in October, rising 6.8 per cent year-on-year up from 6.2 per cent the prior month, according to the latest reading from the ONS.
The figure is significantly less than the amount forked out by tenants across the rest of the UK. Rents across the country rose by 6.1 per cent overall during the month, up from 5.7 per cent in September.
A cocktail of dwindling supply and rising demand, fuelled largely by landlords selling their homes to offset rising mortgage costs, has pushed up rents across the country.
London, which is densely populated, has been hit particularly hard with October ‘s surge in renting costs stretching the furthest since the ONS began recording prices back in 2006.
Despite the housing market showing signs of slowing, property body RICS, said it still expects rental prices to increase by around four per cent over the next few years.
The news will spell further misery for the some 4.6m private rental tenants in the UK. As well as spiralling rents, wage stagnation and a period of rocketing mortgage rates has hit buying power.
Anna Clare Harper, chief executive of sustainable investment adviser GreenResi, said: “Renters are suffering as a result of the pace of rent rises.”
“The only way to reverse the trend of rising rents is for policy to encourage more and better supply, and for professional investors to step into the void that is emerging as traditional private landlords exit in droves.”
The good news is, the government’s latest statistics on house prices showed the cost of a property continued to fall in September.
The ONS said that average house prices over the 12 months to September 2023 decreased in England to £310k.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although reflecting what was happening a few months ago when buyers and sellers were trying to come to terms with rapidly-rising mortgage and inflation rates, this survey includes cash buyers, not just those relying on mortgages, so is more comprehensive than most.”
He added: “Recent data suggests that the threats of rising mortgage and inflation rates are receding. This, combined with pay rises outstripping the cost of living, means we have found on the ground that would-be buyers and sellers are tentatively considering returning to the market.”