Residential rents are on the recovery path in London, as demand for quality rental property is on the rise. Rents increased by 1.9 per cent annually in London during September, according to HomeLet September rental index.
Rents increased in London, for the second month running after a four-month period with the average tenancy agreed in September costing £1,593.
The rents outside London also increased last month by an average of 2.1 per cent, continuing the trend towards higher rents seen in recent months following a period in which rental price inflation was very low. The average rent agreed on a new tenancy signed last month was £927 when compared to £908 in the same month of last year.
September’s increase reflects higher rents agreed on tenancies in almost every area of the country, with only the South-East of England recording a negative rate of annual rental price inflation. The highest increases in rents were seen in Northern Ireland, where rental price inflation hit 4.3 per cent in September, followed by the West Midlands (3.9 per cent) and the East Midlands (3.7 per cent).
HomeLet has expressed concerns over landlords facing a deluge of higher costs from new regulation, taxation changes on buy-to-let mortgages and the prospect of a near-term rise in interest rates. There is also the added uncertainty over the fall-out from the government's intention to ban letting agents from charging up-front fees to tenants.
HomeLet’s Chief Executive Officer, Martin Totty said: “While it is perhaps too early to conclude, this data signals the re-emergence of an upward trend in rents."