Renting a property in London has become an increasingly expensive endeavour for the majority of tenants across the City. Over the past 12 months, typical annual rents in the Capital have soared by almost 20% reaching an astounding average of £2,500.00 per month. This steep rise implies that tenants now need to find an additional £7,500 per year compared to the previous spring to secure a property in the heart of the capital.
However, it’s not just those in the heart of the City that have experienced these significant rent hikes. Greater London has also seen rental prices reach record highs, with the average cost of a home amounting to more than £2,000 per month.
So, what’s causing these price hikes?
The rental market in London has witnessed a significant imbalance between supply and demand, leading to intensified competition among tenants. In the first quarter of this year, the number of inquiries per property was 173% higher compared to the same period in 2019.
These statistics highlight the intense competition faced by tenants when searching for rental accommodations in London. The scarcity of available properties relative to the high demand has created a challenging environment, where tenants often find themselves contending with multiple inquiries and heightened competition.
How do we address this situation?
Put simply… MORE HOMES! If we are to improve the well-being of a huge proportion of Londons’ residents, it is crucial to focus on increasing the supply of rental properties across the City. By expanding the housing inventory, the market can better balance supply and demand, alleviating the pressure on tenants and fostering a more sustainable rental market.
Furthermore, it is essential to consider long-term strategies that address the underlying causes of the housing shortage and promote affordable housing options. This could involve collaborations between the government, private sector, and housing organisations to facilitate the construction of new rental properties and implement initiatives that encourage affordable housing development.
By adopting a comprehensive approach that tackles both supply and demand, London can strive towards creating a rental marketplace that is balanced in-stock availability and it turn, fairer to tenants in terms of choice and affordability. But this can only really happen if more homes are built and the government makes the buy-to-let market more attractive as an investment.
If you’re looking for a new rental property or would like to discuss the potential of finding tenants for your home, speak with the Keatons team today on 020 8981 7788.