Renting in London: asking rents hit a new record high in final months of 2022

The average asking rent in London hit a new record high of £2,480 a month in the final months of 2022, according to new data from property portal Rightmove.

The data, published today, covers the fourth quarter of last year (October to December inclusive). It shows an annual increase of 15.7 per cent for asking London rents, and a 5.8 per cent rise on the previous quarter.

In inner London, which includes the capital’s most expensive areas to live, asking rental prices were over £3,000 a month on average.

Rightmove report that in the first few weeks of this year there have been signs that competition for homes available to rent is starting to ease as more properties become available but the imbalance between demand and supply remains a huge frustration for tenants.

Outside London

Asking rents across Great Britain also reached a new record high (£1,172 a month) after an increase of 9.7 per cent in a year.

With an increase of 0.9 per cent in the final months of the year, compared to the period between July and September 2022, Britain has seen the smallest quarterly increase in asking rents for two years.

The number of available homes to rent had increased by 13 per cent in the run up to December compared with a year earlier, while the volume of people inquiring about rental properties rose by seven per cent over the same period according to Rightmove.

The property portal predicts average asking rents across Britain for newly available properties will rise a further five per cent in 2023, unless there is a significant increase in the number of homes listed to rent.

Across the UK, Wales and the South West have seen the biggest jumps in the number of properties available to rent, leading to a marginal drop of one per cent in average asking rents.

Tim Bannister at Rightmove said: “Although the fierce competition among tenants to find a home is starting to ease, it is still double the level it was back in 2019. Letting agents are seeing extremely high volumes of tenant inquiries and dealing with tens of potential tenants for each available property.

“Landlords will need to balance any rent rises with what tenants can afford to pay in their local area, to continue to find tenants quickly and avoid any periods where their home is empty due to tenants not being able to meet the asking rent.

“There appears to be some more property choice for renters compared to the record low levels of last year which would slightly ease the fierce competition to secure a home.

“This is why we’re forecasting that the pace of annual growth will ease to around five per cent by the end of the year nationally, although this would still significantly exceed the average of 2% that we saw during the five years before the pandemic.”

Simon Leigh of Hackney & Leigh estate and letting agents said: “The rental market remains buoyant, and the majority of our landlords are still receiving multiple applications on their properties.

“Rents have remained stable, due in part to the cautious approach from landlords when considering rent increases at renewal stage, preferring to retain good tenants rather than have even a small void period, or incur the associated costs.”

James Redington, sales and lettings director at Douglas & Gordon, said: “We’ve seen the highest rent increases we’ve seen for decades, and we don’t expect this to slow down in the short-term.”