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Lack of rental properties in London sees asking prices rise for first time since 2014

Asking rents in London have risen to an average £2,000 a month, the highest rate in three years and the first time since 2014 that the capital has had the strongest-performing rental market in Britain.

The rebound has been fueled by a lack of new rental properties in the city, which has pushed prices upwards as competition grows. Average rents are now 3.4pc higher in London than this time last year, according to Rightmove’s rental tracker.

Outside London, average asking rents have risen by a more modest 0.7pc over the past year, to £796 per month, with growth dragged down by flat rental markets in the south west and south east. On a quarterly basis, prices have risen by 2.7pc.

Rightmove found that nationally, on average, it takes a letting agent 36 days from the time a rental property goes on the market until its let is agreed, while it takes 40 days in London.

The national average masks some of the faster places to let such as Stirling, Bristol and Ashford, which all take 22 days, the property portal said.

Miles Shipside of Rightmove said: “After a few years of more plentiful supply in the London market we’ve now reached a point again where competition among tenants for a great rental home can be very high in the most popular rental areas of the capital.”

Since 2016 an increasing number of landlords have been squeezed out of the buy-to-let market, as tax changes and falling yields continue to affect their bottom line.
The Government has repeatedly made changes to the tax structures affecting the buy-to-let market in an attempt to give first-time buyers a better chance of getting onto the ladder, including imposing an extra 3pc stamp duty charge on people buying an additional property.
The fall in the number of landlords investing was made evident by Bank of England figures from March that showed just 12.7pc of mortgages in the final three months of 2017 went to buy-to-let borrowers, the lowest level since 2013.

Source: Yahoo Finance UK

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Availability Of Rental Properties In London Half National Average

The availability of investment properties to rent in London has fallen 46 per cent below the national average, according to new monthly figures from the Association of Residential Letting Agents (ARLA).

ARLA has found that landlords are being increasingly priced out of the capital. This has led to increasing competition in the buy to let sector for rental properties, and a lack of availability of suitable properties.

It was found that in January, letting agents situated in London were managing an average of 99 properties. This is in comparison to the national average of 184. London was also the lowest region for supply during December, but it stood at 130 properties per letting agent then. This was in comparison to a national average of 200.

The buy to let market in London suffers from a unique mix of issues given the capital’s extremely high prices. This is coupled with growing legislation and regulation in the buy to let sector, which adds to making landlords’ jobs more complex.

ARLA chief executive, David Cox, spoke out about the research findings: ‘The rental market in London should be thriving as the capital is a hub for business and culture and attracts a huge influx of new residents every year. But the prospect of being a landlord is becoming less tenable, as potential buy to let investors are deterred by increased taxes and ever more complicated legislation and higher property prices in London are making it becoming more and more difficult for landlords to make ends meet.’

He argued that the increasingly dense field of regulation surrounding the buy to let sector is having an adverse effect on government policies. He continued: ‘Government policies designed to help renters now seem to be having the opposite effect, as landlords are moving away from using professional agents. This puts tenants at risk of falling into the hands of rogue landlords, or novice ones who don’t have any experience in the sector.’

Source: Residential Landlord