Keep knowledgeable with free updates
Merely signal as much as the UK home costs myFT Digest — delivered on to your inbox.
London rents rose on the quickest tempo on file in November, based on official knowledge that highlights the intensifying ache for tenants after two years of rising prices.
Rents in London elevated by 11.6 per cent within the 12 months to November 2024, the quickest annual tempo since information started in 2006, the Workplace for Nationwide Statistics stated on Wednesday.
The common month-to-month hire in London exceeded £2,200 for the primary time, pushing the typical for the UK above £1,300.
Pushed by London, UK rental annual development additionally accelerated to 9.1 per cent in November, up from 8.7 per cent within the earlier month and simply shy of the 9.2 per cent file improve registered in March 2024.
Andrew Montlake, managing director at mortgage dealer Coreco, stated: “Renting is nothing short of brutal. You have to feel for the UK’s tenants as rents are rising at an astronomical and unsustainable rate.”
The notably quick tempo of rental development in London signifies that “something has to give”, he added.
Rents have been rising sharply for the previous two years as landlords handed on rising prices, amid a scarcity of properties to hire and powerful demand from tenants who couldn’t afford greater mortgage funds.
Nonetheless, a survey of property brokers printed final week confirmed that expectations for hire development over the following three months eased in November as demand declined.
ONS rents knowledge collects each present and new tenancies, which implies it may take longer for turning factors to be mirrored.
The ONS additionally reported on Wednesday that UK home costs rose by 3.4 per cent to a median of £292,000 within the 12 months to October, up from 2.8 per cent within the earlier month, and persevering with the enlargement seen for the reason that spring.
Home costs contracted throughout 2023 and initially of 2024, reflecting the affect of the Financial institution of England’s rates of interest rises on mortgage prices.
Mortgage charges have come down from their peak in the summertime of 2023, however have risen once more in current months as the federal government’s October Funds created upward strain on an already accelerating inflation price.
Earlier on Wednesday, the ONS reported inflation rose to 2.6 per cent in November from 2.3 per cent within the earlier month, marking the very best price since March. Along with sturdy wage development, it consolidated market expectations that the BoE is not going to minimize rates of interest when it broadcasts its determination on Thursday.
Elliott Jordan-Doak, senior UK economist at consultancy Pantheon Macroeconomics, stated: “The falls in interest rates that have boosted house price inflation will likely pause now that markets expect the MPC to ease policy only gradually in the wake of the inflationary Budget and especially after yesterday’s acceleration in wage growth.
“That won’t derail house prices, but could take some of the steam out of the recovery.”
