London rent soars to average of £1,100

house rent lettings

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Staff|Agencies20 September 2013

Private rents have reached their second highest levels since 2008 as activity returns to the sector, a major lettings network has reported, with London rents powering ahead.

Average London rent now stands at £1,126, having risen at a much faster rate than inflation. London rates are up by 4.8 per cent year-on-year.

Official figures released yesterday showed that house prices in London are also up by nearly 10 per cent year-on-year, indicating the strength of demand for homes in the capital.

Nationally, average rent stands at £743, just £1 less than an all-time high recorded in October 2012, according to LSL Property Services, which owns chains Your Move and Reeds Rains.

The pace of rent increases stepped up to 0.7 per cent month-on-month in August, following a 0.2 per cent monthly uplift in July.

Rents are 1.3 per cent higher across England and Wales than a year ago, showing an increase which is still less than half the rate of consumer price index (CPI) inflation at 2.7 per cent.

David Newnes, director of LSL Property Services, said that weak income growth, which has an impact on households' ability to borrow, and a lack of housing supply means that the private rental sector is continuing to see strong demand from new tenants.

He said the upward pressure on rents is also coming from an uplift in student renters returning to the market as the new academic year begins.

Mr Newnes said: "Better availability of finance has allowed some households to leave the rental market. And rents certainly felt the short-term impact of that.

"But releasing a blast of pent-up pressure to buy a home is unlikely to change the long-term trend in renting.

"Although Government schemes are helping, buying a first home is still extremely hard on the back of low salary growth."