A rough ride for renters: average London rents hit £2,000 per month

Renters have seen housing costs rise by an above-inflationary 3.4 per cent year on year, according to new figures from Rightmove.

The hike is down to strong demand for homes and a lack of properties, as prospective buy-to-let landlords become reluctant to pay the higher taxes to own rental property.

Outside the capital asking rents rose just 0.7 per cent during the same period to an average of £796 a month.

“After a few years of more plentiful supply in the London market we’ve now reached a point again where competition among tenants for a great rental home can be very high in the most popular rental areas of the capital,” said Miles Shipside, Rightmove’s housing market analyst.

The Association of Residential Letting Agents — Arla — reports that more than one in three tenants have experienced a rent increase in the past year.

​Shipside believes the Government’s decision to slash landlords’ tax breaks and increase stamp duty on buying an investment property are behind the increasing shortage of rental homes.

“This reduced choice could be symptomatic of fewer landlords buying, and some selling up, as rental returns are being diminished by more onerous taxes and little or no growth in capital appreciation, along with increased demand from tenants,” he said.

David Cox, chief executive of Arla Propertymark, agreed: “Over the last few years we’ve seen taxes to both purchase and let a rental property increase,” he said.

“This combination — coupled with continued regulatory change — is unsurprisingly pushing landlords out of the market.

“We predicted back at the end of last year that renters would be in for a rough ride in 2018, and we warned government about the impact on the market. Our fears are now being realised.”

Renters looking to lower their costs should head to the south-east London borough of Bexley, which has been named the most economical place to live in the capital.

A four-bedroom property there costs £408.38 per person per month on average, according to property website onthemarket.com.

However, Bexley’s Zone 6 location means that monthly travel costs come in at £239.30.