London rents have now reached an eye-watering new record average asking price of £2,257 per month during the quarter according to Britain’s largest online property site Rightmove.
Average asking rents outside of London have also hit another new record of £1,126 per calendar month rising 3.5% from last quarter and up 11.8% compared to last year.
This increase in average asking rents means that rents outside of London are rising at the highest annual rate Rightmove has ever recorded in 16 years of reporting. Rents have now risen by 19% (up £177) since the pandemic started two years ago.
By contrast, the climb has been staggering as it took eight years pre-pandemic to reach the same level of growth, illustrating the rapid rise in asking rents since the start of the pandemic. This quarter’s 3.5% jump is the second highest quarterly rise in ten years.
Richard Davies, managing director of Chestertons, said: “Throughout the second quarter of this year, London’s rental market has seen continuous growth in tenant enquiries as well as in the number of tenants extending their rental agreements.
“Those who secured a property at a discounted rental rate during the pandemic are keen to hold on to this deal as long as possible, particularly in the face of rising living costs.
“This has created an extremely competitive market for tenants where many offer landlords over asking price in order to secure a property.”
Rising rents continue to be driven by a shortage of available rental stock, with low volumes struggling to meet high tenant demand over the past two years, according to Rightmove.
Rightmove’s director of property science Tim Bannister, said: “The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand. Last year we saw exceptional numbers of tenants looking to move and this year we have seen no let-up in this trend.”
He added: “Although there is still a shortage of available homes to rent, there continues to be signs of this improving. The number of new rental listings is up 8% since the start of the year. June saw the highest number of new rental listings coming to market of any month this year so far.”
Despite these encouraging signs, available rental stock is still down 26% compared to last year’s levels, while demand is up 6%, which means competition between tenants remains extremely fierce.
Rightmove said it now expects average asking rent growth to reach 8% by the end of the year, up from 5% predicted at the start of the year.