Rental prices across the UK are at record levels, mainly due to a lack of supply. This is especially true in London where prices have risen more than anywhere else in the UK.
Sky-High Rental Prices
The record rental prices in the UK have been widely reported in recent weeks. For example, Sky News reported that people are paying on average nearly £600 a year extra in rent across the UK. In a report from Reeds Rains and Your Move, the average rent was found to be £816 in England and Wales.
Unsurprisingly, in London that figure is a lot higher, with tenants paying on average £1,301 a month – up 11.6 per cent from last year, compared to a UK-wide rise of 6.3 per cent. But despite this, rental yields are only at 4.4 per cent in London, which is one of the lowest in the UK.
Why the rise?
It all comes down to increased demand and less availability. Rents have gone up 10 per cent in real terms in the last five years, and quite simply there is a shortage of properties.
Pressure Leading to Sneaky Tricks
The BBC recently reported on a tactic being used by some estate agents due to the greater pressure in the market. This involves creating fake adverts for properties, and when someone calls up to enquire about the property, the agent tells them it is no longer available – and offers them another one instead. Sometimes the properties are duplicated from other agencies, and sometimes they are simply photos of houses that are not even for rent.
This process, which is called ‘ghost-listing’, is illegal, but it is hard to control. Apparently this is now happening for low-value and high-value properties alike, and it is mainly as a result of the shortage of housing.
London Property Still a Good Bet
As well as the increases in rent, property prices continue to go up in London. The Telegraph recently released a useful tool showing an interactive map of the different boroughs in London that can be used to find out how much properties are likely to be worth in five years time in each area.
It reports on a recent forecast by Savills that by 2020 house prices in the Capital will rise by 15.3 per cent on average. However some of the outer boroughs have the potential to experience larger gains; for example, Lewisham is set to see a 20 per cent rise in property values as more people move out of the centre.
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