A fifth of London tenants paying over asking price
Countrywide, the UK’s largest property services group, announced that 1 in 5 tenants based in London pay over the asking price to secure their homes, by comparison with 1 in 8 tenants over the rest of the UK. London, compared to other cities in the country, has seen the largest growth in rents since 2007.
Countrywide’s monthly lettings index found Londoners were paying an average of £1,309 a month in the year to February, up from £1,295 the year before, £94 above the average monthly asking rent, in London. Over the course of a typical 12 month tenancy, this equates to an extra £1,128 in rent for the average Londoner.
It isn’t just Londoners paying more than asked, reports state that across the UK, 12 per cent of lets were agreed at more than the initial asking price over the past year. The average tenant is now paying 99.9% of the asking price – the highest figure since 2007. Overall the average UK rent is up 3.2% to £926 per month but the rate of growth is down from February 2015, according to Countrywide’s monthly lettings index results.
The proportion of lets agreed at more than the asking price has risen in every year since 2008, demonstrating the continuing balance of power towards landlords. In 2008 just 3.5% of deals were agreed at above the asking price while 23.5% of tenants were able to negotiate money off the asking rent. By 2016 the proportion of tenants able to renegotiate prices down has plummeted to 8%.
The increased rents required by Landlords, especially in the capital, have proved to have astonishing results when looked at retrospectively. For example; if you’re renting in London, you could probably have put together a 23% deposit for the average home in London, with the rent you’ve paid in the last five years.
New research by Shelter suggests renters paid a total of £89,269 over the past five years for the average two-bedroom home in London. That’s 23% of the current average price of £394,905 – more than the 20% deposit required by most mortgage providers.
Landlords and Tenants alike, will need to know what their statutory rights are in relation to the likelihood of increasing rent charges around the UK, especially in the Capital.
If you would like any more information in relation to this article then please feel free to contact me via email: ozan.zorba@bowlinglaw.co.uk.
