The latest property market analysis by London lettings and estate agent, Benham and Reeves, has revealed how the cost of renting in London has climbed by hundreds of pounds a month due to dwindling rental stock levels and could continue to do so if the issue is not resolved.
Benham and Reeves analysed both the change in available rental stock across the London market in the last year, as well as how this has impacted the cost of renting across the capital.
Across London as a whole, the number of available rental properties listed on the market declined by 48% between Q3 of this year and Q3 2020. At the same time, the average cost of renting has increased by £109 per month.
Just one borough, Barking and Dagenham, has seen the level of available rental stock increase when compared to the same time last year – up by 1%. The average cost of renting in the borough has also increased by just 1.% on average.
However, across boroughs where the level of rental stock has fallen by between 10% to 30% year on year, the average cost of renting has climbed by 4% – an increase of £49 per month for the average tenant.
This monthly cost increase climbs to £95 per month in boroughs where rental stock has dropped between 30.1% and 50% versus last year, a six per cent increase in the average cost of renting.
In no less than 10 London boroughs, the level of available rental stock currently on the market has more than halved in the last year – with declines of between 54% to 70%.
At the same time, the cost of renting across these worst-hit boroughs has climbed by 9% on average, equating to a rental increase of £179 per month.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Restrictions imposed as a result of the pandemic saw demand for London rental properties evaporate almost overnight and many landlords were forced to dramatically reduce their rental income expectations simply to secure a tenant.
However, we’ve seen waves of tenant demand return to the capital as social and workplace restrictions have been eased but while this demand is starting to snowball, the level of available rental stock remains notably lower than it was a year ago.
As a result, the cost of renting has climbed quite considerably in many boroughs, with tenants now paying hundreds of pounds more a month as a result. Should stock levels remain muted, there’s no doubt that this upward trend will continue and the cost of renting in London will climb even further.”
|Table shows the year on year decline in rental stock levels and the average change in the monthly cost of renting|
|No. Boroughs||Decline in rental stock levels (Q3 2020 vs Q3 2021)||Change in Average Monthly Rental Cost (%)||Change in Average Monthly Rental Cost (£)|
|6||10% to 30%||4%||£49|
|16||30.1% to 50%||6%||£95|
|10||50.1% or more||9%||£179|
|Rental stock data sourced from Rightmove, rental price data sourced from PropertyData.
Barking and Dagenham was not included in the above table as it was the only borough to see an increase in rental stock levels (11%) and a 1% increase in the cost of renting.
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