London rents rise for 20th consecutive month

Landlord Expert
By Landlord Expert May 19, 2011 09:10

Rent in London is continuing to increase, according to research by Knight Frank, which found that the price of leasing a home in the UK capital went up by 0.4% in April, the 20th consecutive month of increases.

The annual growth rate now stands at 16.3%, and there are fears that many people could be priced out of the residential property rental market. According to Knight Frank’s report, it now costs 25% more to become a tenant in London than it did in June 2009.

The rental increase arises from the difficulty in securing finance in the wake of the global financial crisis. Banks are reluctant to lend, and have raised the minimum deposit required to secure finance, meaning that many people are unable to buy their own home. This has increased the demand on the already popular rental sector.

Knight Frank’s head of lettings, Tim Hyatt, said: “"With strong rental growth outpacing improvements in capital value for the last year, yields have begun to edge higher, much to the relief of landlords."

Investors are starting to cash in on the increased rental possibilities. The Council of Mortgage Lenders last week released figures showing that buy-to-let purchases were up in Q1 2011 compared to the same period a year earlier, which could ease the demand in the long term.

Landlord Expert
By Landlord Expert May 19, 2011 09:10

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