Amateur landlords welcome the return of tenants
The price of renting property in some of the capital’s most sought-after postcodes has surged by more than four times the rate of inflation in a single year.
New research today reveals average rental prices across prime London have risen by almost 10 per cent in the past 12 months, and more than 13 per cent in some areas. The boom is being driven by a desperate lack of supply.
Tim Hyatt, head of residential lettings at Knight Frank, which produced the research, says: A year or 18 months ago people were getting 15 per cent off their rents, but there has been a change in supply and demand.
“Our applicant levels are up 10 per cent, and our supply levels are heavily down, so there has been a drift back in favour of the landlord.
Increased competition has been prompted by the return of the corporate rental market and by increasing numbers of frustrated first-time buyers unable to afford mortgage deposits. Amateur landlords who let properties during the recession are putting them back on the market to capitalise on rising prices, while some second-home owners concerned about capital gains tax are also selling, taking property out of the rental sector.
In Belgravia, the most expensive place to rent in London, an average two-bedroom flat now costs £1,580 a week - up more than 10 per cent over 12 months.
In Wapping, the price of a two-bedroom flat is now £586 a week, up more than 13 per cent over the last year, adding £828 to annual costs.
Families looking for houses are also having to face up to sharp rental increases. Last year, a four-bedroom house in Fulham cost an average £1,154 a month. Today that stands at £1,308, more than 13 per cent higher, or more than £1,800 extra cost a year.