The rental market in London appears to have peaked, with price growth steady month-on-month, according to new government figures.
Data released by the Office for National Statistics (ONS) showed that rents in London have risen by 6.9 per cent in the year to January, unchanged month-on-month.
Although the pace of rent hikes seemed to have cooled, this was the joint-highest annual percentage change since the ONS began the data series in January 2016.
“We’ve seen the peak of rental prices,” Duncan Blakelock, Lettings Director at Kinleigh Folkard & Hayward, said to City A.M.
“A lot of people took three-year tenancies [during Covid] and were locked in at lower prices… these tenancies are now maturing and some people have been priced out of the market so these properties are returning to the market,” Blakelock said.
The average rental price in England grew by 6.1 per cent year on year, unchanged from 2023. Excluding London, prices grew by 5.7 per cent.
Rent growth was slowest in the North East of England, growing by 5.4 per cent year on year.
Meanwhile, data from Rightmove shows that each property listed in the UK received an average of 11 enquiries in January – down from 25 last September but still above the pre-pandemic average of eight.
“[The market is] returning to pre-Covid trends rather than the topsy-turvy market we’ve seen in the last few years,” Blakelock said.
“There’s an influx of stock,” Blakelock said, adding that “prices have softened and we expect that to continue.”
The average rent in London reached £2,119 per month in January, according to Zoopla, versus £695 per month in the North East of England. Property prices in London account for a third of total spend on rent in the UK, according to the ONS.
Rents have continued to grow faster than inflation, which was 4 per cent over the same time period.