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Rental prices outside London ‘surged by 8% annually in February’

Vicky Shaw, PA Personal Finance Correspondent
·2-min read

Rents outside London surged by 8% annually in February, an index has found.

Across Britain but excluding London, the average price of a newly-let property was 8% higher or £68 per month more than in February 2020, according to Hamptons.

The findings marked the strongest increase in rents since Hamptons’ index started in 2012.

The increase took the average monthly rent outside London to £913, up from £845 in February 2020.

In contrast to other parts of Britain, rents in London dipped by 0.2% annually, to £1,759 on average. The decrease was driven by sharp falls in inner London, Hamptons said.

It added that rental growth nationally has been fuelled by a lack of stock, with nearly a fifth fewer homes coming onto the rental market during the coronavirus pandemic compared with the previous 12 months.

London was the only region where there were more homes available to rent in February than a year earlier, the report said.

There is also an urban-rural divide, with  16% more homes available to rent in cities across Britain in February 2021 than a year earlier. In town and country locations there have been respective declines of 28% and 52% over the same period.

The lack of rental homes on the market has meant that so far this year half (50%) of landlords letting a property were able to secure a higher rent than they had previously achieved, Hamptons said. This is the highest proportion since 2016, with an average increase of £60 per month.

In line with weak rental growth London, only 37% of landlords there were able to secure higher rents in 2021, marking the lowest proportion recorded in any region.

By contrast, 62% of landlords in the South West of England were able to achieve higher rents on their properties in 2021.

Aneisha Beveridge, head of research at Hamptons, said: “This year we’ve seen a sharp decline in the number of rental homes coming onto the market. Would-be tenants are now faced with significantly less choice, which in turn is pushing up rents.

“And with many landlords having multiple offers on the table, half of investors have been able to increase the rent they charge.

“Rental stock levels have also been hit with the onset of the pandemic causing investors to hold back.”

Ms Beveridge continued: “Over the last five months, and in an effort to beat the original stamp duty deadline of the end of March (the deadline has since been extended), landlord purchases started to rise, which will add to stock levels when these homes complete.

“Meanwhile the Government announced a new mortgage guarantee scheme in the Budget which is aimed at helping would-be buyers with small deposits, many of whom are currently renting.”

She said both factors “mean rental stock levels may have bottomed out”.