Rents across London leap again in June this year

Harley Street

Harley Street - Credit: Archant

London renters saw yet another rise in costs in June as average weekly rental prices in the city increased, despite consumer price inflation remaining flat.

New data from the Office for National Statistics found that the cost of renting in the capital increased 3.8 per cent in the 12 months to June, the highest increase in the country.

This month’s figures reflect longer term trends, which showed that the cost of renting in the private sector has risen steadily in all areas of Britain since the start of 2011, though the rate of increase has varied across the country.

Private rents in London increased by 17.9 per cent from January 2011 to June 2015, the highest rise for any region of Britain and almost double the national average of 10 per cent.

However, even within London there are wide variations in the rate of increase.

One Highgate lettings agent put the five-year rate of increase closer to 8.5 per cent in the area and suggested that the London figure had been pushed up by rents in more central prime rental areas, such as Marylebone, Mayfair and Regent’s Park, all of which have seen a resurgence in popularity with tenants in recent years.

This is backed up by separate figures from LonRes. The London property data firm found that rents in prime London rose 7.2 per cent in the year to June 2015.

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The survey puts this down to demand outstripping supply in this period, with more than half of lettings agents in prime London reporting an increase in new applicants since the election this May and two thirds predicting rents to rise further in the remaining months of 2015.

Nonetheless, agents also warn landlords to be realistic about pricing over the course of this year, with half of lettings agents reporting an increase in the length of time that properties stay on the market before being let, with the majority also noting an increase in tenants negotiating on rents of new tenancies.

Adam Challis, head of residential research at JLL pointed out that a lack of stock for sale in the prime London market had pushed would-be occupiers into rental property.

But, he said: “Rental growth remains modest, with would-be tenants staying price sensitive, aided by increased choice in the lettings market. Demand is also more likely to seek alternatives in fringe locations rather than pay perceived rental premiums.”

The figures also suggest that private rents in London have gone up by almost a third in the past 10 years (30 per cent). The equivalent increase for England as a whole is 20 per cent.