The average rent of a newly let property has seen an 8% year on year growth, according to a report on the Mortgage Introducer website. This translates as an average of £68 per month higher than in February 2020. Their data also reveals that the South East of England has recorded double digit growth for the first time, with a 10.6% year on year increase.
Overall, rents rose at the fastest rate since 2015, with a 5.6% rise across Britain. The exception to this rule is Greater London, with a 0.2% year on year decrease. In Inner London, the effects of the pandemic were particularly felt, with average rents falling by 17.7%. However, Outer London recorded a 5.3% annual growth.
The variations can be explained by a national shortage of letting stock, with 300,000 fewer rental properties on the market than since the start of the pandemic in March 2020. This is explained by property investors putting new acquisitions on hold, and tenants staying put as they work from home, or shield from the virus.
As a consequence, those seeking rental accommodation have far less choice than previously, and landlords have been able to increase rents with multiple competing offers on the table. Rental homes on the market declined in every region of the UK apart from London, which has been hit hardest by office closures.
The figures also reveal an urban-rural divide, with falls of rental properties in town and country locations of 28% and 52% respectively. Meanwhile in cities, there were 16% more homes available to rent.
It is thought that market conditions will change in early summer, as the eviction ban ends in April, and the new Mortgage Guarantee Scheme which was announced in the budget helps first-time buyers move out of rented accommodation.
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