The number of available homes to rent in Greater London is falling at an alarming rate, according to the latest figures from Home.co.uk.
Over the last 12 months, rents have risen by 4.0% in the Greater London area, which is making life difficult for tenants who are facing higher rents and stiffer competition to secure the best homes.
The number of available homes to rent in Greater London (that have been on the market for 20 weeks or less) plummeted by 24% over the last year, from 52,388 in August 2017 to 39,746 in the same month this year. The current number of properties available to let is at its lowest level since March 2015.
The figures suggest that an average yield of just 3.7% in the capital in August, compared to 4,7% across mainland UK, may be the key factor in landlords leaving the rental market in London.
The supply of all available homes to rent across the UK, including properties that have been on the market for more than 20 weeks, has fallen by more than 10,000 since July 2017 – from 233,453 to 223,115.
“The main driver for rent hikes going forward is an alarming lack of homes to rent, especially in Greater London,” said Doug Shephard, director at Home.co.uk. He added that much of this decline can be ascribed to the ‘BTL exodus’.
“Basic economics tells us that when supply falls prices must rise. In the case of London, it looks like rents will increase quickly – and they need to.”
Elsewhere, the South East was also badly hit, where supply of all available rental properties fell from 30,066 in August last year to 27,728 in the same month this year. According to Home.co.uk, the lack of rental property in the capital is likely a direct result of a raft of costly new legislation and taxation measures in the sector, causing landlords to throw in the towel.
Shephard added: “For too long, rents have lagged behind house price inflation, to the point where yields have sunk too low.”
“Rental returns fundamentally underpin property values and London prices desperately need a fillip to prevent the slide into negative equity.”
“Watch the rents. It’s catch-up time,” he concluded.