Rents in London are rocketing at their fastest pace in more than a decade as private tenants fight over a dwindling supply of homes. Private renters in the capital saw a 4.8% jump in prices in March compared to a year ago with further increases across the UK expected over the next year, the Office for National Statistics said. The figures underscore the huge imbalance that remains in the rental market, with 10 prospective tenants for every available property.
Supply is being strained by a lack of new housing and an exodus of landlords facing pressure from higher mortgage costs combined with a tax and regulatory clampdown. Meanwhile, there has been a huge increase in demand for rental properties, particularly from younger generations struggling to get on the property ladder. The sales and construction completion levels for newly built properties in London have plummeted to their lowest level in around a decade as buyers dry up.
London suffered its fastest increase in private rents since December 2012 but even bigger increases were seen in the East Midlands and Northern Ireland. Overall rents in the UK rose 4.9% in the year to March, up from 4.8% the previous month. The wider housing market continued to stall in official property price data. Average prices have fallen 2% from their peak to £288,000 ($358,000) in February but are still 5.5% up on a year earlier. The year-on-year increase was weakest in the capital at 2.9% and biggest in Northern Ireland, where prices jumped 10.2%.
However, unofficial data from Nationwide Building Society suggests Britain is enduring an even bigger housing slump. Its monthly report found that prices have dropped 3.1% in the 12 months to March, the sharpest annual pace since 2009 in the depths of the financial crisis. It points to a near 5% plunge in prices from the peak.
