Renting in London gets harder as nine tenants scrabble for every home in popular areas
02-27-2014
Private rents in London may be almost double those in the rest of the country, but tenants still face steep competition to secure somewhere to live as demand outstrips supply.
Landlords typically charge £1,211 a month for one-bedroom flats and £1,605 for two-bedders. But across the rest of the UK, the average is £665, according to figures from listings site Gumtree.
It’s a huge gap, but one that is likely to change as demand grows faster than supply in areas outside the capital, says Nick Dunning from property services group Countrywide.
‘The largest increases in demand have been in towns and cities where the most new jobs have been created as the recovery spreads outwards from London,’ he says.
Rents may be climbing but, surprisingly, most tenants say they are good value. More than 73 per cent rated their rent as ‘good’ or ‘very good’ in a recent survey by the National Landlords Association (NLA). Only 20 per cent, described their rent as ‘poor’ value with just three per cent rating it ‘very poor’.
The NLA found that most landlords hadn’t increased rents in the past year, with many tenants forking out the same rent (72 per cent) or less (3 per cent) than they paid the previous year.
The NLA’s Carolyn Uphill says it is ‘pleasing’ most tenants are happy, as landlords face a lot of unjustified criticism for the rising costs of living. Uphill blames high rent levels on ‘a chronic under-supply of affordable housing’ compounded by the Government’s ‘lethargic efforts’ to boost construction.
There is some good news for renters. In the south-east commuter belt, a rise in the number of properties is forcing prices down. Figures from Countrywide showed new rentals increased four per cent faster than the number of tenants last year, leading to a 0.5 per cent fall in average monthly rents.
Inside the capital, east London saw demand rise a third more quickly than supply last year. This led to a scrabble for new homes in this part of the city. Figures from Countrywide showed an average of 6.5 tenants were competing for each rental in 2012, but by the end of 2013 this number had risen to eight.
Stratford is now a rentals hot-spot, according to Zain Mahal of lettings agency Belvoir. ‘Demand is outstripping supply at a ratio of nine tenants to one property,’ he says. ‘Properties are let within a couple of days of coming on the market and many are not even advertised because so many tenants are already registered.’
If tenants do find a good rental property, it is worth signing a long-term contract. Rising rents and the lack of homes to buy mean tenants who have secured a property in a good location are staying put, says lettings agent Russell Day of Riverhomes.
Affordable homes are in short supply but those on benefits have been struck harder than most. Six in ten landlords now refuse them as tenants, according to spareroom.co.uk.
Two years ago, more than a third of landlords accepted tenants on benefits. But figures show almost 57 per cent now state ‘no housing benefit tenants’ in adverts, while 65 per cent refuse them even if they have a guarantor.
Spareroom.co.uk’s Matt Hutchinson says: ‘With rents rising and the welfare budget suffering from further cuts, the outlook for tenants reliant on housing benefit is bleak.’