London rents cool off as tenant demand softens
London rents dropped in November as the market was hit by a seasonal slowdown.
Figures published this morning by peer-to-peer mortgage lender Landbay show rents dropping 0.6 per cent compared with October. The monthly drop took annual London rental growth down to 3.1 per cent in November from 4.3 per cent. The dip in rental growth brings it more in line with pay growth.
The biggest annual rises have been in one-bedroom flats, with average monthly rents up 4.2 per cent to £1,547, followed by three beds which have gone up 4.2 per cent. They compared with Studio flat rental prices which have risen just 1.9 per cent over the past year, with average monthly rents now at £1,161.
“A seasonal Christmas lull has finally managed to put the brakes on the speedy London rental market. But this is a case of notching down a gear rather than an emergency stop,” said Landbay co-founder and chief executive John Goodall.
“Rents continue their upward trajectory, albeit at a slightly less frenetic pace.”
“London’s rental market is very sensitive to changes in supply and demand. The November dip is likely to reflect softening tenant demand as new hiring slows in the run-up to Christmas and fewer people move to the capital for work.”
The fastest rent rises over the past year have been in Hammersmith and Fulham, with rents up nine per cent year-on-year in November. It was followed by Waltham Forest at 8.7 per cent and Barking and Dagenham at 8.5 per cent growth.
Declines in rent were led by Canada, where prices were down 5.4 per cent year-on-year. It was followed by Tower Hamlets where rents fell 2.5 per cent and Islington where rents dropped 0.6 per cent.
There was a muted rental rise of 0.3 per cent in Camden.