Lack of rental properties in London sees asking prices rise for first time since 2014

Asking rents in London have risen to an average £2,000 a month, the highest rate in three years and the first time since 2014 that the capital has had the strongest-performing rental market in Britain.

The rebound has been fueled by a lack of new rental properties in the city, which has pushed prices upwards as competition grows. Average rents are now 3.4pc higher in London than this time last year, according to Rightmove's rental tracker.

Outside London, average asking rents have risen by a more modest 0.7pc over the past year, to £796 per month, with growth dragged down by flat rental markets in the south west and south east. On a quarterly basis, prices have risen by 2.7pc.

Rightmove found that nationally, on average, it takes a letting agent 36 days from the time a rental property goes on the market until its let is agreed, while it takes 40 days in London.

The national average masks some of the faster places to let such as Stirling, Bristol and Ashford, which all take 22 days, the property portal said.

Miles Shipside of Rightmove said: "After a few years of more plentiful supply in the London market we’ve now reached a point again where competition among tenants for a great rental home can be very high in the most popular rental areas of the capital."

Since 2016 an increasing number of landlords have been squeezed out of the buy-to-let market, as tax changes and falling yields continue to affect their bottom line.

The Government has repeatedly made changes to the tax structures affecting the buy-to-let market in an attempt to give first-time buyers a better chance of getting onto the ladder, including imposing an extra 3pc stamp duty charge on people buying an additional property. 

The fall in the number of landlords investing was made evident by Bank of England figures from March that showed just 12.7pc of mortgages in the final three months of 2017 went to buy-to-let borrowers, the lowest level since 2013.

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