Average asking rents for new tenants outside of London have risen to a new record of £1,162 per calendar month. This quarter’s increase of 3.2% is only the third time on record that rents have increased by 3% or more in a quarter, as new asking rents continue to rise rapidly.
In London, average asking rents rise to a record of £2,343 pcm this quarter. This puts the annual rate of asking rent growth in the capital at 16.1%, the highest yearly rate of growth of any region on record.
The pace of asking rent growth is primarily down to the severe shortage of available rental properties, combined with extremely high demand which continues to surpass even last year’s levels in every region and country of Great Britain.
Demand is up by 20% compared with last year, while the total number of available properties to rent is down by 9%. This widening gap between supply and demand is creating ever fiercer competition between tenants looking for a home.
In London, the number of new properties becoming available to rent is down by 24% on last year, while every other region and country in Great Britain has seen a jump in new properties to rent, most significantly in the South West (+19%), Yorkshire & The Humber (+12%) and Wales (+10%).
There is some way to go to narrow the gap between supply and demand enough to steady new asking rents, however it does at least give tenants in many areas some more choice compared with last year, though they are very likely to still be competing for the property with many other renters.
Recent mortgage interest rate rises means that even with record rents, the average monthly mortgage payment for a new first-time buyer putting down a 10% deposit is now a fifth (20%) more than the rental payment for the equivalent type of property – £1,121 pcm for the mortgage payment compared with £932 pcm to rent.
Source Rightmove rental price increase