Two separate reports highlight that while London's property market is still subdued at best, the rental market remains healthy and rents area rising. However, even though rents are rising after being 'too low for too long' according to one report, another confirms what many of us already know; London rents remain unaffordable for over half of the population and will cost over half of a tenant's monthly earnings to afford.
The two reports are of course, both right. But, what does that mean for London’s rental market and its tenants?
London rents on the up?
While London house price growth remains subdued at best, a recent report states that rents in the English capital are “soaring” as demand is on the up but the supply of rental properties isn’t rising quickly enough to satisfy it.
Indeed, some London boroughs are reportedly seeing double-digit growth, which is the result not only of that high level of demand but also a period where “rents in London have been too low for far too long”.
It appears that although the changes in policy affecting Buy-to-Let investors has been tough on landlords, the ensuing reluctance of many to enter the market or expand their portfolio, has resulted in supply of rental properties in the city not keeping pace with demand. This means that that rents are now pushing higher, thanks to imbalance between supply and demand.
London remains least affordable city to rent
A headline we know you won’t be surprised to see. However, it’s always interesting to find out what the details of such claims are. In this case, a new report has looked into rental affordability across the UK’s cities and while the news that London rent is expensive and the most unaffordable, isn’t new, the numbers are still worth considering.
Rents in London cost, on average, 52% of tenant’s earnings. That’s more than double the 23% of tenant’s earnings it costs to rent a property in the country’s most affordable city of Durham.
However, it’s also interesting to see that both Bath and Brighton & Hove are considered the joint most expensive cities to rent in, as it also costs tenants an average of 52% of their earnings.
Despite the high cost of rent in London and some other UK cities, tenants still want and need to live there. This can mean a difficult choice for both tenants and landlords, with rents remaining high and demand for those expensive rental properties also still high.
One way to help ease the way for both parties, is introduce a rent guarantor. For a landlord it makes sense as it gives them peace of mind and of course, is a guarantee that their rent will be paid, regardless of anything that might happen with the tenant.
However, from a tenant’s perspective you may not want to ask a member of your family or a close friend to act as your guarantor. Particularly as it might mean they gain access to certain financial details of yours that you would prefer they didn’t. But there is another way.
You could use a rent guarantor service, such as the one we at RentGuarantor.com, offer.
We assess all the details we request from you and then, based on your specific circumstances, your application is approved, or not, by us. We accept applications from every type of tenant and each application is processed and assessed on an individual basis.
This is a great way for tenants to secure a property they want, without having to bother family members or close friends for rent guarantor duties. It can also help enhance your relationship with your landlord as they know you’ll meet their terms and they can rent their property to you without worrying about large rent arrears.
