Landlords are now asking for in excess of £3,000 per month for an average home in central London, according to fresh data.
Figures published by property portal Rightmove this morning revealed a sharp jump in listed rent costs at the heart of the capital.
Typical inner-London asking prices jumped 7.5 per cent to £3,010 in the final quarter of last year, according to the research. This was up by a sixth from the same period a year earlier.
Listed rents also grew in outer parts of the capital, by 4.1 per cent in the last quarter to an average of £2,089. The Rightmove figures take into account all property types.
Overall a 5.8 per cent increase in landlord asking prices was seen across Greater London in the last three months of 2022. This dwarfed a 0.9 per cent hike recorded across the UK as a whole in that time.
Flatshare portal SpareRoom reported recently that the cost of renting a single room soared by a third in some London postcodes last year.
Meanwhile census data showed that the number of London households renting privately had passed one million after rising by 25 per cent in a decade.
Rightmove director of property science Tim Bannister said today: “Letting agents are seeing extremely high volumes of tenant enquiries and dealing with tens of potential tenants for each available property.”
But he urged caution over prices.
“Landlords will need to balance any rent rises with what tenants can afford to pay in their local area, to continue to find tenants quickly and avoid any periods where their home is empty due to tenants not being able to meet the asking rent.”
Bannister suggested that the gradual growth in supply of properties for rent could act as a brake on the rampant cost of renting.
“There appears to be some more property choice for renters compared to the record low levels of last year which would slightly ease the fierce competition to secure a home,” he said.
“This is why we’re forecasting that the pace of annual growth will ease to around 5 per cent by the end of the year nationally, although this would still significantly exceed the average of 2 per cent that we saw during the five years before the pandemic.”
Richard Davies, chief operating officer at estate agents Chestertons, agreed there had been a “much needed” boost in rental property availability in the capital since the beginning of this year.
“Just since 1 January, we have seen a 14 per cent increase in new rental properties coming to the market,” he said.
“Due to more properties being made available, some landlords are open to negotiating their initial asking rent, which means some tenants can strike a deal at the moment.”
But James Redington, lettings director at estate agent Douglas & Gordon, said there was “no sign” of a halt to rent growth.
“We’ve seen the highest rent increases we’ve seen for decades, and we don’t expect this to slow down in the short term,” he said.
“The government’s continued pressure on landlords through tax changes, along with growing financial commitments on rental properties, can be off-putting to existing landlords and people looking to invest in a buy-to-let.
“However, London is still a fantastic place to live and work. It is consistently voted as one of the best places to live in the world and continues to attract vast numbers of people year on year, despite the rising rental costs, due to its identity as a financial, cultural and educational hub.”
