Renting in London:Bexleyheath leads the way as south-east London claims the three hottest rental spots in the capital

Bexleyheath's train links are luring hordes of renters to this south-east London district, while across the capital, prices are starting to drop - ever so slightly...

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Bexleyheath is the hottest area in London for would-be renters, the latest Rightmove Rental Tracker report reveals.

The south-east London town has fast transport links to the centre of the capital, with a 35-minute commute on trains into Charing Cross, Victoria and London Cannon Street stations.

Average monthly rents here between April and June were £1,135, way below the average rent across the entire capital of £1,998.

Second most in demand was Welling, also in the borough of Bexley, and where average rents are £1,234 a month. Nearby Erith was third most popular and even cheaper at £1,039, while Romford in Essex, at £1,199, and Carshalton in Surrey, £1,252, were fourth and fifth on the list.

The report revealed some rare good news for renters in London - the average rent slightly fell by 1.1 per cent compared with the previous quarter, thanks to a 22 per cent surge in the number of rental properties coming on the market.

Buy-to-let investors rushed to snap up properties before new stamp duty rises came into force in April and their new acquisitions are now coming to market in a huge wave.

Sam Mitchell, Rightmove’s head of lettings says: “The big spike in March transactions resulting from a large number of investors beating the more punitive stamp duty tax deadline has created a rental supply boost which is good news for prospective tenants.

"Once the tax relief changes start to be phased in from next year new buy-to-let activity could slow further. However, rental demand is still outstripping supply in many areas of the country.”

Although average rents fell thanks to the buy-to-let surge, in Stockwell - the fastest rising area in the capital - they soared from £1,805 a month to £2,244.

Completion of various high-spec projects in Nine Elms saw rents in the area rise to £3,145 from £2,756, while even established Hammersmith saw a rise from £2,127 to £2,405.

Although Brexit has already hit property prices in London, there was just a three-day dip in rental demand immediately after the vote. 

Mitchell says: “If confidence in buying houses does falter it could lead to more people looking to rent, perhaps in the short-term, and that would mean that rents could rise further.”

Landlords seeking the best returns to compensate for stamp duty rises and the reduction on mortgage interest relief are increasingly turning to houses of multiple occupancy.

They can still provide double-digit annual returns but there are pitfalls for the unwary.

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