London rents back on the up

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After a 16-month decline during the pandemic, the average cost of renting in London is on the rise again. Zoopla’s latest UK Rental Market report – up 1.6% from a year ago – saw tenants renting privately in the capital pay an average of £1,592 (for a one- and four-bedroom home) in September.

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This time last year – mid-lockdown – London rents had registered an annual drop of 0.5%.

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Activity in London’s rental market has also increased rapidly, as the city gradually reopens for business. The number of tenants agreeing in the three months to end-September was 50% higher than the five-year average.

Fares in the rest of the UK (except London) grew very rapidly – an average of 6% annually in September. And, while still undervalued by 5% compared to before the start of the pandemic, London is the least affordable place to rent in the UK.

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According to Zoopla, rental costs in London account for over 50% of single income payments, compared to the UK average of 37% (taking into account London), while the market means a lack of rental homes. That it costs on average. 19 days to find a home for rent in London compared to 15 days as in the UK average.

Richard Davies, Head of Lettings at Chesterton’s Estate Agent, said: “This continued increase in demand, particularly in prime central London, is having a huge impact on the supply of properties available for rent in the capital.

“As a result, rents have risen sharply and tenants now have much more limited options than last year. On average they are only able to see one or two properties that meet their criteria, which is very different from a year ago when they were able to see at least five.

Zoopla says it expects a “strong end to the year” for the London rental market, driving rental growth to around 4%. It estimates that this level of rental growth will remain broadly across the capital at 3.5% during 2022.

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