London rents rise at record 11.6%

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London rents rose at the fastest pace on record in November, according to official data that highlighted the acute pain for renters after two years of rising costs.

Rent in London The Office for National Statistics said on Wednesday that it grew by 11.6 per cent in the 12 months to November 2024, the fastest annual pace since records began in 2006.

The average monthly rent in London has risen above £2,200 for the first time, pushing the UK average above £1,300.

Driven by London, annual UK rent growth also accelerated to 9.1 percent in November, up from 8.7 percent in the previous month and just shy of the record 9.2 percent increase recorded in March 2024.

Andrew Montlake, managing director of mortgage broker Coreco, said: “Renting is nothing short of brutal. You have to feel for UK tenants as rents are rising at an astronomical and unsustainable rate."

The particularly fast pace of rent growth in London means "something has to give", he added.

Amid a shortage of rental properties and strong demand from tenants who can't afford high mortgage payments, rents have risen sharply over the past two years as landlords pass on rising costs.

However, a survey of estate agents published last week showed that expectations of rent increases in the next three months Relaxed in November As demand fell.

ONS rent data aggregates both existing and new tenancies, which means that changes may take longer to be reflected.

The ONS also reported on Wednesday that UK house prices rose by an average of 3.4 per cent to £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. happened

The contraction in house prices during 2023 and into early 2024 reflects the impact of Bank of England interest rate hikes on mortgage costs.

Mortgage rates have fallen below their peak in the summer of 2023, but have rebounded in recent months as the government's October Budget put upward pressure on already accelerating inflation.

A line chart of the annual % change in UK rents and house prices showing the annual inflation rates were higher than last month

Earlier on Wednesday, ONS Inflation rose to 2.6 percent November marked the highest rate since March, up from 2.3 percent the previous month. Along with strong wage growth, this aligned with market expectations that the BoE would not cut interest rates when it announced its decision on Thursday.

Elliott Jordan-Dock, senior UK economist at consultancy Pantheon Macroeconomics, said: "The interest rate cuts that have fueled house price inflation are likely to stall now as markets expect inflationary budgets and especially MPC will ease policy gradually after yesterday's pace in wage hikes.

"It won't derail house prices, but could take some of the steam out of the recovery."


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