Private rents climb in London despite national fall

Published by Jon Land for 24dash.com in Housing and also in Bill Payments

Private rents in London grew by 0.5% during February bucking a national downward trend, according to figures released today.

The Buy-to-Let Index from LSL Property Services plc, showed a 0.1% drop across the country to £731 a month even though rents climbed in half the regions.

The strongest monthly rental inflation was a 1.8% rise in Wales, followed by the North East where rents were up 0.9% on January. The sharpest falls were in the North West, at 1.3%, followed by a 1.1% drop in the East of England and a monthly fall of 0.7% in the South West.

Only one region saw rents fall on an annual basis; the average rent in the South West is now 1.2% less than a year ago. Rents in London showed by far the fastest annual growth, rising by 6.2% – or £64. The South East saw the next biggest year-on-year rise, of 3.3%, while in Wales rents were 2.9% higher than last February.

David Newnes, director of LSL Property Services, said: “February has seen a more vibrant sales market reduce the strain on the private rented sector during its sluggish off-peak season.

"While a modest increase in supply has had an effect too, in the longer-term, the supply of rental homes will have to increase considerably to prevent monthly rent rises when the rental market re-enters its traditional peak season.”

The total amount of rent late or unpaid recovered to levels not seen since November. Total arrears in February were £248m, down from £269m in January. This equates to 7.4% of all rent across England and Wales, compared to 8.1% of all rent in January.

David Newnes concludes: “After the festive stretch, households have now managed to rein in their finances. The return to November levels confirms this was a temporary issue. But previous improvement was an uphill march against inflation.

"As the year progresses, and in the longer-term, it will be the trajectory of the wider cost of living and wages that will determine the more fundamental ability of tenants to pay their rent.”

Commenting on the latest rise in London's private rents, London Assembly Green Member Darren Johnson, said: “The Mayor has ruled out any meaningful reform to slow rent rises, preferring completely ineffective voluntary measures.

"We give our tenants some of the weakest protections in Europe, we should copy the smart rent controls and security enjoyed by tenants in countries like France and Germany where rent can’t rise faster than inflation guaranteeing fairness and predictability for tenants and landlords.

“We cannot go on pricing low paid workers out of swathes of London, it’s hurting our economy and pricing out a generation of renters.”