In November, rents in London increased to an average of £1,177 per month, whereas the average cost of renting a home outside the capital decreased over the same period to £653 per month, the latest HomeLet Rental Index reveals.
The increase in rental amounts in the Capital means costs are now 13% higher than last year. This is a stark contrast to the other UK regions that are only an average of 1.6% more than at the same time in 2010.
Although most other UK regions have seen an increase in rents over the past year, they are minimal compared to the increase in London. Increases range from 0.2% in the North West and almost 6% in East Anglia. The only regions that have seen average rental amounts decrease are Northern Ireland, the North East, and Scotland, which have dropped by an average of almost 2% over the past 12 months.
Ian Potter, Operations manager at ARLA (Association of Residential Letting Agents), said: “The increase in the number of people renting a home means it’s now more important than ever that consumers have full confidence in lettings agents, and the industry must respond to their concerns about bad practice. That's why in the absence of regulation, we developed our own licensing scheme to ensure all ARLA members are protected against negligence.”
John Boyle, Managing Director of HomeLet, said: “The soaring cost of renting a home in the Capital, compared to the rest of the UK, reflects how demand for rental properties is increasing due to people’s continuing struggle to get onto the property ladder. Combined with the current Eurozone issue, this economic uncertainty could result in the demand for rental properties increase, and cause rental amounts to soar even further. Traditionally demand for rented homes dips before Christmas – however, London is bucking this trend and demand is higher than ever.
“This demand offers a fantastic opportunity for landlords and property investors who could offer a much needed supply of rental properties to the industry. However, as Ian mentions, it is essential confidence in the industry is maintained and tenants only rent a home through a regulated letting agent.”
You can view a summary of the November 2011 HomeLet Rental Index here homelet.co.uk/rentalindex