Rents on newly let homes increased by 1% year on year in the 12 months to August, but fell in London by 0.8% on an annual basis, the latest lettings index shows.
It was the third month in a row that rents fell in London despite there being 21% fewer homes available to rent than last year, according to the monthly index from Hamptons International.
However, rents on properties where tenants renewed their rental agreement are more robust. In London, rental growth on renewed tenancies increased 3.2% year on year as 3.7% more tenants stayed put than last year
‘With affordability stretched and less choice available on the open-market, more tenants are choosing to stay put. And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods,’ said Aneisha Beveridge, analyst at Hamptons International.
Across Britain the average rent of a new let rose to £975 per calendar month in August 2018. The most expensive rents were in inner London at £2,609 per month, followed by Greater London at £1,702, Outer London at £1,530 and the South East at £1,052.
The next most expensive rent is in the East of England at £957, then the South West at £807, the Midlands at £689, Wales at £683, Scotland at £658 and the North of England at £648.
The index report explains that stock levels continuing to decrease in London because, since April 2016, when the stamp duty surcharge on additional homes was introduced, landlords have sold considerably more buy to let homes properties they’ve purchased.
Indeed, the figures reveal that so far this year, there were 6% fewer homes available to rent in Great Britain than at the same period last year. But in London stock levels were down 21%.
The index also shows that Wales and the Midlands have driven rental growth outside the capital to increase 2% year on year, the strongest growth in nine months with rents up 3.3% in the Midlands and 4.4% in Wales.
New lets increased by 1.8% in the East of England, by 1.7% in the North of England, by 1.6% in the South West, by 1.4$ in the South East and by 0.4% in Scotland.
Over August, inner London rents picked up for the first time in six months with a rise of 0.4% while rents in outer London continued to fall, down 1.1%.
However, rents on renewed tenancies, where tenants chose to stay put, rather than move, remain robust. In August there were 2.5% more tenancies renewing across Britain than last year, which means that rental growth on renewed tenancies has risen 2.8%, the highest level in 10 months.
With less stock available on the open market to choose from, particularly in the capital, more tenants are choosing to renew their current tenancies than move on. In London, the number of tenancy renewals has risen 3.7% so far this year compared with the same period in 2017.
