Lack of lettings supply pushes rental growth to record highs

Tenants will still need to stump up a deposit ranging from £630 to £2,415 once the fees ban comes in, Rightmove has warned.

The portal has analysed its rental listings data for the first quarter of 2019 to assess the impact of a five-week deposit cap that will accompany the tenant fees ban once introduced in June.

Based on a five-week deposit cap, Rightmove has calculated that the cheapest deposits will be in the north-east at £630 per property on average.

The most expensive will be in London at £2,415 per property.

In London the cheapest deposit will be in Rainham at £1,216 on average, with the most expensive in Kensington at £4,065.

Its data also shows a lack of property supply is pushing up rents to record levels.

Available rental properties are down 33% annually in London and down 13% outside the capital.

This has helped push asking rents up 8.2% in London, the highest annual growth rate since Rightmove began reporting the data back in 2012, while average asking rents in London are up 2.9% on last quarter alone to £2,093 per month.

Outside of London, asking rents were up 2.7% annually but fell 0.2% during the first quarter of 2019 to £796 per month.

Miles Shipside, housing market analyst for Rightmove, said: “The upcoming tenant fee ban should spell some good news for tenants and it may lead to more people being able to move more often if they want to, thanks to the reduction in the cost of moving.

“It remains to be seen if the ban will be passed on in other ways such as increasing rents, and tenants will still need to find a pretty hefty rental deposit in many areas.

“What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing, so perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there.”

 

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5 Comments

  1. 22fdunst91

    Proof that Government policy is failing tenants? Landlords have been vilified in recent years and punitive tax changes have exacerbated the issue. Rogue landlords should be dealt with severely but thousands of good landlords have either left the sector or decided against adding to their portfolio. This is now leading to a shortage in supply and upward pressure on rents. Perhaps Shelter should direct their attention towards the Government not landlords and agents. Successive Governments and their failed policies are the real villain of the piece here…!

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  2. Will2

    James brokenshire’s announcement on banning s21 is likely to have an even greater impact on supply of rental property. as it will frighten new investment and existing investment.  I predict supply of rentals will continue to drop but increase in sales supply which might keep  sales prices lower but brexit is also impacting the sales market.

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    1. JMK

      Absolutely.  S21 is an insurance policy.  You hope you’ll never have to use it but it’s there just in case.  I’ll start selling some properties now it’s facing extinction.

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  3. RichardHill61

    “It remains to be seen if the ban will be passed on in other ways such as increasing rents” – hysterical!!

    What’s his job again?

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  4. Home Provider

    “perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there.”  Hilarious.

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