Rental demand still soaring in London

According to the latest rental trends tracker from Rightmove rents have grown at the fastest annual rate in 16 years. The property portal's quarterly dataset of UK rental activity (April - June 2022) reveals a 3.5% jump in asking rents, the second highest in ten years.

London sees new record average asking rents of £2,257 per calendar month, with annual growth now exceeding 15%, the highest ever annual rate of any region.

Outside of London , average asking rents are also rising at the highest annual rate Rightmove has ever recorded in 16 years of reporting. Rents have now risen by 19% (+£177) since the pandemic started two years ago.

SHORTAGE OF  RENTAL HOMES

By contrast, it took eight years pre-pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the pandemic. This quarter’s 3.5% jump is the second highest quarterly rise in ten years.

Rising rents continue to be driven by a shortage of available rental stock, with low volumes struggling to meet high tenant demand over the past two years.

Although there is still a shortage of available homes to rent, there continues to be signs of improvement. The number of new rental listings is up 8% since the start of the year. June saw the highest number of new rental listings coming to market of any month this year so far.

INTENSE COMPETITION BETWEEN TENANTS

Despite these encouraging signs, available rental stock is still down - 26% compared to last year’s levels - while demand is up 6%. This means competition between tenants remains extremely fierce.

As high tenant demand continues to overtake last year’s exceptional levels, and available rental stock is slow to recover, Rightmove expects average asking rent growth to reach 8% by the end of the year, up from 5% predicted at the start of the year.

Average monthly rental payments are now 40% higher than they were ten years ago, while average mortgage payments for the same properties are up 13%

Despite the challenges, more landlords are planning to expand their portfolios in the coming 12 months (34%) than reduce them (11%)

The data is compiled from the asking rents of properties coming onto the market on Rightmove.co.uk and measures prices at the very beginning of the rental process. Download report.

If you haven’t had your rental investment property valued recently, now is a good time to get an accurate appraisal of what we could achieve. Get in touch with Christian Harper for a free market appraisal.