15:43 PM, 15th September 2011, About 12 years ago
Buy to let rents in London have surged to a new peak of £1,202 a month.
Rents are still climbing in most regions, but are soaring in the capital as London reports the only rising house prices in the country over the past 12 months.
Rising prices and difficulties in finding mortgage finance have led to more tenants looking to rent.
According to the Communities and Local Government Department figures, house prices in London were up 0.9 per cent over the 12 months ending July 2011 – everywhere else returned a price fall.
Meanwhile tenant referencing firm Homelet has released research showing rents have hit a record high – up from an average £1,154 in July.
John Boyle, managing director of HomeLet, said: “Tenants in London are stretching their budgets more than ever, not only due to an increase in rental costs, but also rising energy costs following the announcement by utility companies that gas and electricity prices are set to soar even higher.
“This isn’t a good sign for some tenants who may struggle as winter approaches and the cost of running a home increases even more.
“Despite increasing rents due to high demand, the private rented sector is still offering a stable alternative to home ownership. Whilst many tenants are still renting because they can’t afford to buy, an increasing number of tenants are choosing to rent for the long term because of the flexibility that that it offers.”
The Homelet study also shows the average tenancy in London has shortened from 27 months to 22 months over the past two years.
“The decrease in tenancy lengths would indicate that tenants are starting to move more frequently again. And we can expect tenancy lengths to decrease in 2012, as the level of high value short term rentals increases in 2012 during the Olympic Games, which is positive news for letting agents.” said Boyle.