London rents hit a record £2,661 a month

The average rental price in London is now £2,661 per month – 4% higher than this time a year ago, according to quarterly data from housing platform Rightmove.

Meanwhile, rents are rising at a faster clip in the rest of the UK, with the average price of a property outside of London up 7% compared with last year to £1,314 per month.

In the first quarter, the same measure showed rental prices in the capital reaching a record of £2,633 per calendar month, with the average price outside of London hitting £1,291.

The figures represent a new, depressing, quarterly record. While the overall balance between supply and while demand has continued to improve during the second quarter of this year, the latest snapshot of the rental market highlights how busy it remains compared to more normal levels seen pre-pandemic. Both letting agents and tenants are unlikely to feel any improvements yet.

The number of enquiries each rental property is receiving from would-be tenants is now 17 which, while down from 26 this time last year, is more than double the eight at this time in 2019.

This can be partly explained by the fact that the number of available properties is currently 14% higher than this time last year, Rightmove said.

Despite these improvements, there is still a way to go to reach pre-pandemic supply and demand levels. The number of available homes to rent is still 20% below 2019, while 22% more tenants are looking to move than in 2019.

"The market remains out of balance and difficult for tenants," said Rightmove’s director of property science Tim Bannister.

"We need landlord investment to increase stock and help achieve a healthier supply and demand balance in the market. There is an opportunity to encourage landlords to continue to invest in good quality homes, for example through tax changes, incentives to help with energy-efficient upgrades or a general sentiment change in government towards working alongside and with landlords. "

Read more: UK house prices rise again in blow to first-time buyers

A recent Rightmove study showed that around 120,000 more rental properties are needed to bring rental price growth back towards more normal pre-pandemic levels of around 2-3%, based on current demand.

There have been some early positive signs from the new government regarding improvements in the rental market for tenants.

Labour has pledged to get 1.5m more homes built, which could improve the availability of rental properties for tenants if some go to the private rented sector, or more tenants can become first-time buyers.

The new data reinforces recent research by Skipton Group released this week which showed that only one in eight renters can afford to buy in the area in which they live.

High rent, bills and house prices mean it is more difficult for renters to buy their first home than it is for existing owners to move on.

Its new index, compiled by Oxford Economics, claims renters are four times less likely to be able to buy than homeowners.

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