London rents hit record high as landlords renegotiate 'cut-price terms'
Rightmove data suggests the average monthly rent sits at over £2,000
Last updated 27th Jan 2022
The average monthly rent in London has hit a new record high of £2,142 per month, according to Rightmove.
The property website said rents in the capital increased by 10.9% annually in the fourth quarter of 2021.
The average asking rent in London is three percent higher than at the start of 2020, it added.
The capital had experienced a drop in average asking rents in 2020. Tenants were looking for more space away from cities during lockdown, flats temporarily fell out of favour, and landlords offered tenants willing to stay cut-price rents.
More recently, London's popularity has been returning and landlords have been able to negotiate higher rents for the new year.
Though those thinking of returning to the capital, after living in other parts of the country, might have to think twice after the recent rent hikes.
Rent prices rise alongside household bills
In inner London, asking rents jumped by a record 16.2% annually in the fourth quarter of 2021 to reach £2,577 on average.
They recovered from a 14% drop at the start of 2021 to also rise just above pre-pandemic levels for the first time.
Meanwhile, the average monthly rent being asked outside London has jumped by a record 9.9% annually.
The rises will put a further squeeze on tenants already struggling, with soaring bills as living costs bite. Some landlords have also seen their incomes squeezed and may now be increasing their rents in response.
Landlords hike rents due to tax burdens and pandemic, study finds
A separate study released by the Landlord Works, a platform launched by Nationwide Building Society to help landlords, found one in four (25%) have raised rents to help cover increased tax burdens.
And more than a quarter of landlords with portfolios of 20 or more properties told the survey they have cut the number of properties they hold in order to reduce the tax impacts.
Meanwhile, a poll for the National Residential Landlords Association (NRLA) found that, between March 2020 and September 2021, 23% of private landlords surveyed in England and Wales had lost rent due to the impact of Covid-19.
Some had agreed on rent cuts with tenants, while some had experienced issues with unpaid rents and others had seen an increase in empty properties.
'Landlords look to renegotiate previous cut-price terms'
Rightmove's director of property data Tim Bannister said: "2020 was defined by the race for space outside of cities, as tenant priorities changed and many moved further out looking for a larger property with green space or temporarily moved back in with family.
"London was perhaps the biggest example of this, where landlords significantly decreased asking rents by the end of the year to encourage tenants to stay in the capital.
"A year on, asking rents have finally risen beyond pre-pandemic levels, a sign that the capital has not lost its pull and popularity with renters as landlords look to renegotiate previous cut-price terms."