Property shortage fuels London rent rise

The average price for rental property in London has reached an all-time high of £533 per week, partly because of landlords cashing in on a shortage of available housing across the capital.

According to estate agents Foxtons, an average of 29 would-be renters were competing for every available property in London in September, with some landlords stoking the market by encouraging bidding wars and asking for large amounts of rent upfront.

Several factors are fuelling demand, suggests Foxtons. Students have returned for the new university term, corporate relocations are back following the Covid pandemic and rising interest rates mean some potential buyers are holding off purchasing.

Foxtons reports that south and east London saw the most intense rental competition in September, with 37 applicants per property, while north London witnessed the largest monthly increase with 20 percent more applications. Central London meanwhile recorded the highest average weekly rent at £636, a 30 percent increase on prices last year.

Discussing the findings, Sarah Tonkinson, managing director for the institutional private rental sector and build-to-rent at Foxtons, said: “The normal seasonal trends you’d see in the third quarter were taken to their extremes this year.”

“August and September are always peak lettings season. Now that we are past the peak, renter demand should relax as it does in the fourth quarter, but I suspect it’ll remain significantly higher than we’d typically see for October.”

Empty homes also remain a contributor to lack of supply in the capital.

Research released earlier this year revealed there were 87,731 vacant properties in London. The study, by CIA Landlord Insurance, found that Southwark alone had 4,976 properties that were not being lived in, including council homes, properties managed by housing associations, and private rentals. Camden was close behind with 4,771, while Newham had 4,283.

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