Massive London rent rise takes UK average growth over 10%

An eye-watering annualised rent rise in Greater London of 27.3 per cent has helped pushed the all-UK total yearly hike to over 10 per cent.

The website Home - which scours portals to prepare an authoritative monthly snapshot of the sales and lettings markets - says the mix-adjusted average rent for the UK has risen 10.1 per cent over the last 12 months. 

It says: “Most of this increase is driven by the phenomenal rebound in Greater London rents which indicate annualised growth of 27.3 per cent, concomitant with a collapse in lettings supply. There were just under half the number of properties to let entering the capital’s market compared to a year ago. 

“Demand in the regions, especially in the North and West, has eased and rents are either rising more slowly or correcting in the wake of the lockdown boom.

“The annualised mix-adjusted average asking price growth across England and Wales is now at 7.4 per cent; in March 2021, the annualised rate of increase of home prices was 4.8 per cent.”

But Home is also warning that talk of rent controls in both Scotland and London may be starting to effect the sales market in both those locations, as buy to let investors stand back in case politicians act.

The website says that annualised sales price growth in Greater London is a mere 3.7 per cent right now - significantly lower than much of the rest of the country, with the exception of Scotland, where it’s just 2.2 per cent.

Home notes: “These two markets are currently the slowest of all despite some improvement. It is also worth noting that both markets are increasingly menaced by the threat of rent controls, which is a clear disincentive for buy to let investment.”

London’s Labour Mayor Sadiq Khan is arguing to win powers to controls rents - currently he has no authority to do so - while in Scotland the Scottish National Party has entered into a policy alliance with that country’s Green Party, which has put strict rent controls and other radical reforms of the private sector at the heart of its demands.