More tenants pay over asking price as supply outpaces demand
The number of tenants who agree to pay rent above the asking price has risen slightly across the UK, but fallen in London, new figures reveal.
In central London last month, only eight per cent of homes were let above the asking price, according to the August letting index from estate agents Countrywide.
This time last year, the proportion was 17 per cent, and the new figures are the lowest seen since 2011. Across Greater London, the proportion was 13 per cent – four per cent lower than for 2015.
The national picture saw a marginal rise of 0.2 per cent, with only Wales and the North of England showing similar falls to London – three per cent and 0.3 per cent respectively.
The East of England the South West saw the proportion of properties rented above asking price rise by 2.3 per cent and 3.1 per cent.
The new data indicates that the majority of rentals are still being let at asking price.
In Greater London, the proportion of homes rented at asking price is 76 per cent – a 10 per cent increase on last year – and in Central London, the proportion is 89 per cent of homes – up by 20 per cent.
The national figures stands at 28 per cent of homes rented at their asking price, an increase of 13 per cent on last year.
Industry experts say supply in the rental market remains high – benefitting tenants who are looking for the right home.
Last month, London and the South East saw the number of homes available to rent rise by 26 per cent and 22 per cent respectively, compared with the same period in 2015.
However, tenant demand in the last year only grew by eight per cent in London and three per cent in the South East.
Nationally, supply increased by 26 per cent while demand grew by 17 per cent.
Across the UK, average rents have risen to £960 a month.
And while rents in August did rise by 1.5 per cent, this was a significant drop from the four per cent growth seen in the same month last year.
Rents in Central London fell by two per cent and by 1.4 per cent in the South East as a result of the shift in bargaining power from landlords to tenants.
Johnny Morris, research director at Countrywide, said the outpacing of demand from tenants by the number of rental properties available was slowing down the growth of rents.