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- February 6, 2024
The cost of renting a flat in London is on the rise, and this is something that tenants should be aware of. With rents increasing year on year, it is important for tenants to try and agree to renew their tenancy agreement as soon as possible before rents go up again next year.
The reason for this is that rents are likely to continue to go up in the near future. This is due to a combination of factors, including the rising cost of living in the city and the limited availability of rental properties.
This is especially true in the most popular areas of London, where demand for rental properties is high and the supply of available properties is limited.
The situation is likely to get worse in the coming year, as the government has recently introduced a number of tax changes which could lead to more landlords looking to sell their properties and fewer rental properties on the market.
This means that there will be fewer choices for tenants looking for rental properties in the city, and the cost of renting a flat in London could increase even further.
According to the latest figures from SpareRoom, rents have hit record levels in Q4 2022; with UK room rent seeing an unprecedented increase of 13% year-on-year. Rental rates for rooms in Greater London have hit an all-time high of £949 per month. This marks a significant jump since September 2022 when the average rent was over £900 monthly and has been increasing steadily ever since.
Not only is the demand for rental properties much higher than their availability, but landlords are feeling more insecure than ever before. By comparing the fourth quarter of 2022 to that of 2021, it’s clear London has experienced the biggest surge in rent payments throughout all UK regions.
The only United Kingdom region to have a decline in average rents was Scotland, which dropped 6.0% due to the Cop26 summit inflating rent prices in Glasgow during Q4 2021.
The summer and autumn of 2022 saw an unprecedented demand for rental properties, while the supply was at a nine-year low. This created a huge gap between those searching (245,351) and available rooms (34,085). Although there were fewer renters in the last weeks leading up to Christmas – due to people heading home for festive holidays – the number of actual rooms decreased too during this period.
Despite some of the recent government-led initiatives, it seems that landlords and agents are losing faith in the UK rental market. A survey from SpareRoom has found that nearly half intend to diminish their portfolios or depart altogether by 2023, indicating a worrying decrease in available properties over the next year – drastically more so than what was seen during the past 18 months.
Taking all of this into account, it is essential for tenants to try and agree to renew their tenancy agreement as soon as possible. With the impending storm of rent rises coming in 2023, being proactive instead of reactive could be the difference between securing a property and being left without one. While rents are high at present, waiting until next year may lead to even higher prices being charged and less availability.
Ultimately, tenants in London should be aware of the impending rental storm coming in 2023 and do everything they can to prepare for it ahead of time. Taking steps such as agreeing to renew their tenancy agreement early or considering longer-term arrangements could help ensure that they are not caught out by the increased cost of renting a flat in London.