The city of London is seeing a resurgence of its rental sector after a year of decline. This is according to the latest HomeLet Rental Index figures for August. The data shows that the average monthly rent in London has risen for the third month in a row to £1,713 per calendar month.
Here is why London rents are rising and what we can expect going forward.
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What has happened to London rent prices?
The UK property market has been booming over the last year. But not all areas of the property market have benefited from this boom, and London’s rental sector has been one of those left behind.
The economic fallout from the pandemic and the rise of home working resulted in people leaving the capital. And international migration to the capital also fell off due to global travel restrictions.
This created a large imbalance in supply and demand that forced landlords to cut rent or accept low offers.
However, as the latest figures from HomeLet show, the tide is turning and the capital is showing signs of recovery.
Rental prices in London have increased for three months in a row. In the last month alone, rents rose by 4.1%, which is a higher rise than in any other area of the country.
Why are rent prices in London going up?
The resurgence of the London rental sector is being driven by rising demand as the city slowly bounces back from the pandemic. More sectors are reopening and workers are returning to their offices.
Young professionals and s tudents who moved out of rented accommodation in the capital and returned home are coming back. International students who were previously locked out by travel restrictions are also slowly returning.
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What does the future hold?
Rob Wishart, head of business intelligence at HomeLet & Let Alliance, mentions that demand for housing and certain property types is currently outstripping supply in many areas. This is putting upward pressure on rental prices.
With many regions now experiencing unprecedented demand, he thinks that increases in London rent prices are likely to continue in the near future.
He explains: “We may see London accelerate at a faster rate than the rest of the country in the coming months, as international travel ramps up and rates of working from home move in the opposite direction.”
Can I get help with my rent costs?
Understandably, rent increases could leave some struggling with their housing costs. Those whose income has been impacted by the pandemic may be particularly vulnerable. Luckily, there are ways to get help with your rental costs.
- If you are on a low income or are unemployed, you can claim Universal Credit. Part of your monthly payment will include help towards your rent costs. In some circumstances, you may also be able to claim Housing Benefit to help with your rent costs.
- If Universal Credit or Housing Benefit does not cover all of your rent, you can claim for a discretionary housing payment (DHP). This is extra money from your local council to assist with rent costs.
- You might be able to claim a Council Tax reduction so that you pay less (or none at all). To find out whether you are eligible and how to apply, head over to the gov.uk website.
