Jan

London lags behind rest of UK as rental prices show substantial rise

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Private rental prices increased by 1.8% in the 12 months to December, the highest yearly rate since July 2017, according to the latest Office of National Statistics (ONS) data.

Its Index of Private Housing Rental Prices shows that excluding London, rental prices for the UK went up by 2.7%, from an increase of 2.5% in November. London’s private rental prices dropped by 0.1% in the 12 months to December, unchanged from the previous month, and was the lowest of any of the English regions. The ONS says this reflects a decrease in demand because workers have switched to remote working, as well as an increase in supply, after many short-term lets changed to long-term lets.

East Midlands

In England, the largest annual rental price increase in the 12 months to December 2021 was in the East Midlands at 3.3%. Private rental prices in Wales grew by 1.5%, down from an increase of 1.6% in November, while in Scotland prices grew by 2.3%, up from an increase of 2% in November and the highest annual growth rate since records began in 2012. The annual rate of change for Northern Ireland at 5% was even higher.

ARLA’s November PRS report found that the average number of new prospective tenants per branch rose significantly from October to November while the number of tenants experiencing rent increases fell for a third month in a row, from 68% in October to 58% in November. The Royal Institution of Chartered Surveyors’ latest report found tenant demand showing another solid monthly increase in November with a net balance of 48% of respondents citing a rise. The ONS says these supply and demand pressures can take time to feed through to its index, which reflects price changes for all private rental properties rather than only newly advertised rental properties.

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