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HomeLet Issues Rental Market ‘Unsustainability’ Warning

After Covid-created doldrums, London’s rental market regaining the wind in its sails.

HomeLet’s latest Rental Index for July show average London rents of £1,868 per calendar month – up by 1.2 per cent on the month; little different from the national average increase of 1.3 per cent. HomeLet puts the average UK rent at £1,127 per calendar month, £948 if London is excluded. The average in London alone is now £1,868.

‘This month’s figures paint a picture of a rental market that is struggling to meet the needs of renters or landlords, with spiralling prices a bad sign for both parties’, said HomeLet and Let Alliance chief executive Andy Halstead.

‘One of the main factors leading to rising rent prices is a lack of supply on the market to match demand. This problem could worsen if landlords continue to leave the market, leaving a rapidly shrinking supply of available rental properties. The issue is reflected by the overall findings from our recent Landlord Survey, where 18 per cent of all landlords that we spoke to said that they expect to reduce their portfolio or leave the sector entirely in the near future – this figure rises higher to 22 per cent for landlords based in London.

‘The same survey revealed that four out of five renters are worried about how they will pay their rent. A market too volatile for landlords to rely on receiving rents due, and properties too expensive for renters to cope with, is clearly unsustainable’.

Research undertaken on behalf of Paragon Bank has found that in the second quarter of 2022, just under 80 per cent of Outer London landlords saw an increase in tenant demand. during the previous three months.

‘We know that the private rental market in London was hit particularly hard by the Covid pandemic but has rebounded strongly since and these latest figures provide further evidence of this’, said Paragon Bank mortgages managing director Richard Rowntree.

‘As one of the world’s greatest cities, London is extremely dynamic, constantly evolving as a diverse mix of people come and go, calling it home as they study, work, travel or raise families. This is why it is important for the capital to have a thriving PRS, enabling people to benefit from the flexibility that rented homes provide’.