Residential properties in London, one of the top rental markets in the world, continued to register a healthy growth in rent last month. In July 2018, the rents in London increased by 3.3 per cent annually when compared to the corresponding period last year.
According to the latest HomeLet Rental Index, the average rent in the UK capital now stands at £1,615 a month. This shows that London lettings market has maintained its growth momentum despite predictions of a slowdown. Though growth in house prices is not the same compared to the pre-Brexit era, the rents continue to grow steadily. On a month-on-month basis, London rents are growing at 1.2 per cent.
Working professionals, first-time buyers saving for their deposits, students, international travelers, and the business community are driving the demand for quality rental homes in London.
Buoyed by this growing demand, a section of the landlords surveyed by HomeLet intend to hike the rents in the next 12 months. In fact, 17.9 per cent of the landlords revealed that they planned to increase the rent within the next six months. Another 18.7 per cent of the landlords intend to hike the rent over the next 6-12 months depending on the demand growth.
Rents in London are the highest for the UK, which averages £777 excluding the capital. After London, the South East region commands the highest rent at £1041 per month. A vibrant job market, business opportunities and education options are drawing more tenants to London, prompting landlords to hike rents periodically.
It was found out that almost a half of the tenants (46.7 per cent) are currently saving to buy a home while the primary reason given for not buying yet was high house prices and deposit levels. The top three elements that tenants like most about renting are the flexibility to move easily, property location and the ease of property maintenance, especially in London where the lettings market is dominated by professional players.
The survey also revealed interesting insights into tenants’ future plans. More than 68 per cent of the tenants intend to continue renting for a year or longer. About 33.5 per cent of the tenants revealed that they plan to continue renting for the next 1-3 years. This is primarily because 48 per cent of the tenants find the deposit level (to buy a new home) high.
All these findings make London lettings market an attractive investment proposition for buy-to-let investors and landlords intending to expand their rental portfolio. If you are keen on buying a buy-to-let home in London to leverage the rental growth, contact estate agents at Strawberry Star. We have homes for sale in London postcodes where rents are growing consistently.