Rents have risen by more than 20 per cent in some parts of the country during the past two years, new figures have suggested, but dropped in London
The increase in rental values is the most pronounced in the South West, up 23.5 per cent since January 2020. It is the equivalent of a rise of £195 per month, according to the figures from Hamptons.
In contrast, typical rents in Inner London have fallen 11.6 per cent and on average it costs £305 less to rent there than in January 2020.
Rents have risen by more than 20 per cent in some parts of the country during the past two years
Rents in London’s 13 inner boroughs have risen 3.9 per cent compared to the same month a year ago
The estate agents compiled the figures using a database of 90,000 rental properties and based them on achieved rather than advertised rents.
All regions across the country have seen a rise in rents, except from Inner London, where values are still below the levels seen before the start of the pandemic.
However, they have begun to pick up there, rising for the first time since January 2020 on an annual basis.
It means rents in London’s 13 inner boroughs have risen 3.9 per cent compared to the same month a year ago.
They now stand at an average of £2,329 a month, up from -0.1 per cent in October.
Rental growth by region since the pandemic began (Jan 2020 verses Nov 2021)
Hamptons attributed the increases to workers returning to the office and global travel reopening.
The figures are published as new Covid restrictions come into play amid fears about the growth in Omicron cases.
Hamptons said that inner London’s rental market was boosted by a 14 per cent annual rise in the number of applicants looking to rent.
However, there were 71 per cent fewer homes to rent than in November 2020. The agent said that last year, the rental market was flooded with short-let properties that had been brought onto the long-term rental market at the start of the pandemic.
November also marked the first time in 20 months that the rate of Inner London rental growth caught up with Outer London where rents have been rising for the last 15 months.
A change in working patterns since the pandemic began has driven tenants to seek more space, boosting rents in the suburbs, while suppressing demand for inner-city living.
A slow start to inner London’s recovery has meant that rents outside the capital have risen three times faster than those in London since the pandemic began.
Across Greater London, rents have risen 5.9 per cent since January but outside London rents have increased 16.1 per cent.
The average rent in Britain is up 7.9 per cent in the past year, according to Hamptons
A change in working patterns since the pandemic began has driven tenants to seek more space
Having recorded eight consecutive months of double-digit growth, the South West continues to see the highest rate of rental growth with rents rising 14.6 per cent during the last year.
In the region, there were 42 per cent more applicants looking to rent and 21 per cent fewer homes available in November than at the same time last year.
Aneisha Beveridge, of Hamptons, said: ‘Across Great Britain, rents have risen 7.9 per cent over the last year, marking the strongest rental growth recorded in any November since our records began in 2013.
‘A lack of stock and a continuation in tenants’ willingness to pay for more space has fuelled growth. In particular, this has benefitted Southern regions – outside of London – which have seen the biggest rent rises since the pandemic began.
‘While there are few signs to suggest that stock levels will rise next year, we expect the rapid pace of rental growth to slow as affordability barriers set in and household budgets come under further pressure.’
She added that the pandemic has divided London into a city of two-halves.
‘Rents in Inner London have been hardest hit as the rise of flexible working has seen fewer new tenants move into the capital, while some tenants have moved to leafier neighbourhoods in search of more space,’ she said. ‘But the resumption of office life and opening of global travel marked a turning point for the rental market in November.
‘While there’s still a way to go, rents in Inner London are on track to reach pre-pandemic levels by the middle of 2022. This means, in a reversal of this year, we’re likely to see Inner London rents outperform Outer London in 2022.’