By Laura McGuire
Private renters in London are faced with the highest costs since 2012 as a sparse and competitive market send the cost of homes in the capital to new highs.
Landlords in the capital increased rental costs by 4.8 per cent in the 12 months to March 2023, up from an increase of 4.6 per cent in the 12 months to February 2023, the latest figures from the ONS showed.
Riccardo Tessaro, co-founder and chief of flexible co-living brand Gravity Co, said: “The growing mismatch between supply and demand is pushing up rents sharply as increasingly desperate would-be renters outbid each other in the race to secure a place to live,”
He added: “In many areas, prospective tenants aren’t just grappling with record-breaking rent rises; stiff competition means good homes are being snapped up as soon as they come on the market.”
Data from rental site Spareroom has shown that in the first leg of this year the average asking price of rent in London has jumped 20 per cent – with the average price of a room in the capital now costing £952 up from £794 in the same period last year.
“There’s now not a single London postcode with an average monthly rent under £700,” Matt Hutchinson, director at SpareRoom, said.
Even traditionally cheaper areas like Abbey Wood in South East London are becoming more expensive, largely due in part to their “relative affordability,” but also as a result of better transport links, due to the Elizabeth Line.
“Demand is likely to fall a little over the course of the year, but unless something is done to stop the continuing decline in rental supply, things aren’t likely to improve much for renters. Government has to do much, much more to help, or the housing crisis will become a housing disaster,” Hutchinson added.
As increased mortgage rates and energy bills place increased pressure on landlords, rent prices in the rest of England also soared by 4.6 per cent.
Sarah Tonkinson, managing director of Institutional PRS and Build to Rent, said: “Over the last few years we have seen both extremes in the lettings market – firstly in the post-lockdown market, with its high supply and great deals for renters, and then the 2022 market, with rapidly rising rents due to unprecedented demand and an incredibly low supply – which shows that no market lasts forever.
“It’s important to know or have someone on your side who understands all the intricacies of the market you’re currently letting a property, finding a rental or renewing a tenancy in. It’s also important to get started early this year. Demand rose 4 per cent in March while new listings rose 19 per cent as the London lettings market gains momentum.”
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