New figures have indicated to Simon Morris that London’s rental growth significantly outstripped the rest of the UK’s during the third quarter of 2015.
Soaring house prices, coupled with limited residential property stock, have made it harder than ever before for people to buy their own home in London, This has forced many people to rent and According to the Telegraph, private sector rents in the UK capital have increased a staggering 34% throughout the past decade.
London vs. UK
The latest HomeLet Rental Index indicates that the market shows no signs of slowing down any time soon. Property Wire recently reported that the Index found that London rents vaulted a massive 7.5% in the third quarter of 2015. This means that it now costs £1,560 per calendar month for the average Londoner to rent in the UK capital.
The typical Londoner now pays £800 more rent per month than citizens in the rest of the UK. The Index suggested that average rent in the rest of the country climbed 3.5% in the corresponding period. It is interesting to note though, that rents vaulted 9% in Scotland from July-September 2015, and rents increased in nine of 12 UK regions during the same span of time.
The poll also determined tenants’ views of the UK rental market. When asked, 64% said that they’ll continue to rent for at least a year, and 90% admitted that they were happy with their current landlord. Yet 71% would rather buy their own home, and 66% believe that the need to save for a deposit is the most significant roadblock to their plans for home ownership.
Martin Totty, chief executive of HomeLet parent company Barbon Insurance Group, commented: “Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit yet. 66% of those questioned said that a deposit wasn’t affordable for them.”
In other words, some people can’t afford to own their own home in the current market. With UK house prices continuing to rise, this could boost the London rental sector going forward, as more people seek to rent residential property in the UK capital going forward.
Find out more on the Simon Morris Blog