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Asking rents soar as available properties dwindle

Owain Thomas
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Owain Thomas

Average asking rents in London rose to an all-time high by the end of 2018 and are rising at a rate not seen since the beginning of 2015, according to Rightmove.

It expects rents in London to continue rising in 2019 by around 4%, out-pacing the rest of the country which is likely to rise at around 3%.

The average asking rent per month in the capital rose 5.3% on the year to hit £2,034 – led by a shortage of available properties and increasing tenant demand, Rightmove said.

Compared with this time last year, available rental stock in London is down 22% while outside London there are 10% fewer rental properties marked available.

Rightmove blamed the stamp duty surcharge as the primary reason for landlords not investing in more properties.

And the estate agent noted the flood of rental properties which came onto the market in London between 2016 and 2017 keeping rental prices under £2,000 per month for almost three years.

Outside the capital, the average asking rent per month was £798, down slightly on the previous three months but overall it was up 2.7% over the year.

Newbury, Swansea, Dundee, Dudley and Hinckley witnessed highest rises in asking rents across the rest of Great Britain, with the North West seeing strong increases in tenant demand.

Stamp duty deterring landlords

Rightmove commercial director and housing market analyst Miles Shipside noted that the higher stamp duty on second home purchases in 2016 deterred many landlords from investing in the buy-to-let market, exacerbating the ongoing dearth of available properties.

And he highlighted that there was yet to be any significant boost in stock from the many build-to-rent programmes.

“In addition, the more punitive treatment of tax reliefs has meant some landlords are also exiting,” he said.

“We forecast that average asking rents will continue to slowly strengthen further in 2019, by perhaps 3% outside London.

“In the capital there are no signs of an increase in buy-to-let activity, which may lead to asking rents growing further by around 4%,” he added.