Rents increased by 2.6 per cent in London last year
The supply of new properties listed to rent in London fell significantly in 2018 while the number of tenants looking for a home reached its highest ever level.
The quarterly London lettings report from Foxtons revealed that supply fell by 13 per cent at a time when more people than ever were looking for a home to rent in the capital.
It says that with almost 175,000 tenants registered in 2018, the average number of registrations per new rental listings increased to just under nine, its highest ever level.
Indeed, the number of renter registrations over the course of 2018 compared to 2017 was 8 per cent higher across all of London and demand did not slow down in the fourth quarter which is traditionally a slower market.
According to Sarah Tonkinson of Foxtons it is good news for landlords for the start of 2019. She pointed out that the average weekly rent is now £456, up 2.6 per cent year on year.
The average weekly rent for a studio flat was £289, up 1.5 per cent year on year, for a one bed flat it was £366, up 2.2 per cent, for a two bed flat £461, an annual rise of 1.6 per cent and for a three bed flat it was £658, up 3.9 per cent.
A breakdown of the figures show that Zone 2 saw the biggest increase in tenant registrations with a 13 per cent rise in demand while supply fell by 11 per cent.
Zone 1 saw the highest rental increases of 2018, specifically with larger properties with three or more bedrooms seeing the biggest hikes.
Gross yields for flats rose over 2018 from 4.5 per cent to 4.9 per cent but this is in contrast to the annual rate of return, which slowed significantly to 3.6 per cent from 7.8 per cent in 2017.