It’s no secret that the UK has been undergoing something of a housing crisis for a number of years now. Successive attempts to tackle the issue still leave us with affordable homes in short supply.
However, a lesser known statistic to come out of this data is that the number of available rental properties is actually decreasing. So, what’s the consequence of having fewer properties to rent? Logically, the prices then increase.
Availability for rental property in the final quarter of 2019 has seen a startling drop. It is at its lowest for over 4 years, and perhaps unsurprisingly, as availability is intrinsically linked to price like any form of business, London landlords have benefitted the most.
Although we’re seeing UK rental prices rise fairly steadily, London rental prices have increased at a much faster rate when compared to the rest of the country – in conjunction with the fact that availability in the capital has decreased so much.
Data from Data Loft and Statista shows that over the last twelve months the average rents achieved across Central and East London was £1,806 per month. This is a +5% change on the past twelve months. In Greater London the average rental prices are lower but still up on last year from £1,640 to £1,694. When these figures are compared with the rest of the UK (which has an average rent of £828) its clear that the London rental market is subject to a premium.
Just for a better picture as to how the capital is affected, another area seeing rapid increases in rental asking prices is Manchester, the economic powerhouse dominating the North of England. Despite seeing an annual increase of 3.3% in rental prices, average monthly rent still only stands at £741, less than half that of London.
Clearly, landlords won’t always achieve the prices they ask for and there’ll be a gap in asking prices for rental properties and rental amounts paid, but one thing remains the same; both are on a significant upward trend.
Across our core areas of Central and East London, according to our research, we’re seeing specific trends develop. For example, in Canary Wharf – a rapidly upcoming residential location – houses are being let for an average of £1,769 pcm which is a 2.8% increase over the last 12 months. What’s interesting though, is that the percentage of tenants aged between 18 and 29 has gone up by a massive 61%. These findings are replicated in other areas of London where the demographic of renters has traditionally been in higher age-brackets. Westminster properties let for an average of £2,207 pcm, a 1.6% increase since last year, but we see a staggering 73.6% increase in tenants aged between 18 and 29.
It’s clear to see that the property market is being skewed towards younger people not being able to afford buying a house, and therefore it’s this demographic that is flooding a shrinking market.
Because of increased government regulation in the private-rented sector, more and more landlords are exiting the market, and although it’s good news if you can afford to buy, it’s quite the opposite if you can’t. We’re rapidly heading towards the complicated situation of having more prospective tenants than rental properties available.
On our website, we offer an up to date Rental Price Index which will keep you informed about your local area’s property numbers and averages over the last twelve months, as well as the demographic of tenants renting in the area.