Rents in London rose by 0.8% month-on-month in October to £2,063, with no sign of the seasonal slowdown that normally hits the London rental market in the autumn, according to the monthly Landbay Rental Index.
The firm says the latest rises suggest that London’s housing shortage combined with the capital’s continually falling unemployment rate and growing pay for many has put an end, at least for the time being, to the usual seasonal fall in rents that starts in the autumn. This was the case in 2014, when rents rose in every month except July when they fell by just 0.1%.
This year has seen a sustained period of rental increases, with only small month on month decreases between June and August, before increasing again in September (up 0.7%) and October (up 0.8%).
Landbay said that typically an autumn seasonal slowdown in the rental market is caused by lower tenant demand after heightened demand in the summer from students, first jobbers moving for work, and the expiry of annual contracts that originated in previous summer rental rushes. The fact that it did not happen last year and shows no signs of arriving this year demonstrates that the London private rental sector is seeing a period of consistently high demand and insufficient supply of properties.
October’s rent increases were fastest for three-beds, which are often rented by families moving for work (up 5.4% year-on-year) and one beds that are most popular with first jobbers and young professionals (up 4.6%).
Rent rises were felt across London, with just two boroughs – City of London and Ealing – seeing monthly falls in rent.
John Goodall, co-founder and CEO of Landbay, said: “Seasonality has always been a strong feature of London’s rental market so the fact that it appears to be declining in influence is a powerful sign of the increasing strain the private rental sector is under to house the UK population. The simple fact is that more people are renting for longer and there aren’t enough properties to meet demand. With London’s economy going from strength-to-strength, people are willing to compete for rental properties, pushing up prices.”
“In previous years, price-conscious London renters could take advantage of the seasonal dip in rents to find cheaper rents in the autumn or winter. Consistent rent rises throughout the year has taken away that option across the capital.”
