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London rents rose at the fastest pace on record in November, according to official data that highlights the intensifying pain for tenants after two years of rising costs.
Rents in London increased by 11.6 per cent in the 12 months to November 2024, the fastest annual pace since records began in 2006, the Office for National Statistics said on Wednesday.
The average monthly rent in London exceeded £2,200 for the first time, pushing the average for the UK above £1,300.
Driven by London, UK rental annual growth also accelerated to 9.1 per cent in November, up from 8.7 per cent in the previous month and just shy of the 9.2 per cent record increase registered in March 2024.
Andrew Montlake, managing director at mortgage broker Coreco, said: “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 particularly fast pace of rental growth in London means that “something has to give”, he added.
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Rents have been rising sharply for the past two years as landlords passed on rising costs, amid a shortage of properties to rent and strong demand from tenants who could not afford higher mortgage payments.
However, a survey of estate agents published last week showed that expectations for rent growth over the next three months eased in November as demand declined.
ONS rents data collects both existing and new tenancies, which means it could take longer for turning points to be reflected.
The ONS also reported on Wednesday that UK house prices rose by 3.4 per cent to an average of £292,000 in the 12 months to October, up from 2.8 per cent in the previous month, and continuing the expansion seen since the spring.
House prices contracted during 2023 and at the start of 2024, reflecting the impact of the Bank of England’s interest rates rises on mortgage costs.
Mortgage rates have come down from their peak in the summer of 2023, but have risen again in recent months as the government’s October Budget created upward pressure on an already accelerating inflation rate.
Earlier on Wednesday, the ONS reported inflation rose to 2.6 per cent in November from 2.3 per cent in the previous month, marking the highest rate since March. Together with strong wage growth, it consolidated market expectations that the BoE will not cut interest rates when it announces its decision on Thursday.
Elliott Jordan-Doak, senior UK economist at consultancy Pantheon Macroeconomics, said: “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.”
https://www.ft.com/content/fa6fdb8e-c36e-4854-8b3a-1552ab41f217
