Private rents in London lifted by 5.5% in the year to July, the highest annual rate in 17 years, data from the Office for National Statistics shows.
This rise for tenants in the capital is up from a 5.3% rise in the year to June, “the highest annual percentage change since the London data series began in January 2006,” says the government data body.
Across the UK, rents rose by 5.3% over the same period to July, up from 5.2% in the 12 months to June.
The regions which saw the highest growth of 5.5% over the last year, apart from the capital, were the West Midlands and Yorkshire and the Humber, as landlords pass on higher housing costs to tenants.
The area that experienced the lowest rental growth was the North East at 4.6%.
The data highlights how London has shrugged off the effects of the pandemic, which saw its rents lag behind other regions, due to the rise of hybrid working, the ‘race for space’, and lower numbers of foreign investors.
The ONS says: “The annual inflation rate of private rental prices in the UK began to increase in the second half of 2021. Annual growth was seen across all regions except London, where prices decreased.
But it adds: “The annual percentage change in rents increased across all regions in 2022, including in London, and this continued in early 2023.”
The jump in rents contrasts with slowing house prices in figures also put out by the ONS today.
This showed average UK house prices slowed to a 1.7% rise to £288,000 in the year to June, down from a 1.8% increase in May.
Shawbrook managing director Emma Cox says: “With the property market overall less busy, a reduction in competition from owner occupiers will create a favourable environment for landlords to consider expanding portfolios.
“With a robust demand in the rental market, landlords might consider diversifying into higher-yield options like houses in multiple occupation, which could in turn contribute to an increase in available properties for rent.”
Earlier this month, the average cost of rent in England jumped 19% hitting a record £1,367 per property in July compared to the previous month, according to data from Goodlord.
It added that rents in Greater London lifted by 1.1% to £1,965.
