Rents in London reach record high

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Rents in London have reached a record high, according to the latest buy‐to‐let index from LSL
Property Services.

The 0.6% monthly increase in May means the average rent in the month was £1,038, surpassing the previous high of £1,033 in November.

Across the country, rents rose for a second consecutive month in May, increasing by 0.4% on monthly basis.

The average rent in England and Wales rose by 0.4% to £712 per month, with rents returning to their January level.

The question over whether rents have been rising or falling has become a hot political issue. The Government claims that its cap on local housing allowance and its decision to allow councils to strike deals with landlords to lower rents in return for direct benefit payments has helped put a downward pressure on rental prices.

In March, the housing minister Grant Shapps highlighted statistics from the English Housing Survey which showed that in real terms rents had fallen over the last year.

Despite the monthly increase, LSL's index - which only covers the buy-to-let market - did show that the rate of annual increase slowed, with rents 2.3% higher than a year ago, compared to 2.4% in April.

David Newnes, director of LSL Property Services, said: “The end of spring has brought with it renewed activity in the rental market, and rents have returned to the level seen before the impact of the stamp duty deadline rush by first time buyers. The reality is that thousands of frustrated buyers are still financially trapped between a rock and a hard place. Historically high rents and rock‐bottom savings rates are hampering attempts to save for the larger deposits banks now require – not to mention meeting the cost of the reinstated stamp duty tax. In turn, fewer tenants are able to leave the sector, and the strong tenant competition is pushing up rents as a result, making saving for a deposit harder still.

“However, it’s not just involuntary renters that are adding to demand. Given the current concerns over the economy and labour market, the flexibility of renting is proving attractive for those adopting a wait‐and‐see approach to house purchase. Given this appetite for rental accommodation, rents are unlikely to see sustained declines any time soon.”