Lack of lettings supply pushes rental growth to record highs

April 18, 2019

From Property Industry Eye

Tenants will still need to stump up a deposit ranging from £630 to £2,415 once the fees ban comes in, Rightmove has warned.

The portal has analysed its rental listings data for the first quarter of 2019 to assess the impact of a five-week deposit cap that will accompany the tenant fees ban once introduced in June.

Based on a five-week deposit cap, Rightmove has calculated that the cheapest deposits will be in the north-east at £630 per property on average.

The most expensive will be in London at £2,415 per property.

In London the cheapest deposit will be in Rainham at £1,216 on average, with the most expensive in Kensington at £4,065.

Its data also shows a lack of property supply is pushing up rents to record levels.

Available rental properties are down 33% annually in London and down 13% outside the capital.

This has helped push asking rents up 8.2% in London, the highest annual growth rate since Rightmove began reporting the data back in 2012, while average asking rents in London are up 2.9% on last quarter alone to £2,093 per month.

Outside of London, asking rents were up 2.7% annually but fell 0.2% during the first quarter of 2019 to £796 per month.

Miles Shipside, housing market analyst for Rightmove, said: “The upcoming tenant fee ban should spell some good news for tenants and it may lead to more people being able to move more often if they want to, thanks to the reduction in the cost of moving.

“It remains to be seen if the ban will be passed on in other ways such as increasing rents, and tenants will still need to find a pretty hefty rental deposit in many areas.

“What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing, so perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there.”