Londoners are being pushed out of the city as the number of available rental homes drops and the cost of rent reaches historic levels.
The number of rental properties on the market in London has dropped by 17% in the last year alone, research released on Thursday shows.
Meanwhile, demand for homes has remained as prevalent as ever. As a result, the average rent in the city has crept up to £1,785 a month, a report by Hamptons International found.
But the problem extends beyond the capital. The East Midlands and the east of England have also experienced drops in available rental homes of 15% and 12% respectively since 2016.
According to Fionnouala Earley, residential research director at Hamptons International, the change is likely down to landlords attempting to beat the stamp duty charge.
“The rush to buy before the stamp duty change led to an increase in stock as landlords brought their purchases forward,” Earley explained.
“That’s now eroding as tenant demand carries on, hence the fall in the number of properties available to rent this year compared with last year.”
A combination of decreasing supply and constant demand for housing is seeing rents soar, she said.
But the problem is at its most prominent in London’s exclusive boroughs.
In the last 12 months alone, the number of rental homes on the market in Kensington and Chelsea has dropped by 38%.
At the same time, average rents have sky-rocketed to £3,110 a month - the equivalent of more than £37,000 over the course of a year.
The data paints a similar picture in the boroughs of Westminster and Islington, where available rental properties have also dropped by around a third.
Kensington and Chelsea
Number of rental properties: -38%
Average cost of rent: £3,110
Islington
Number of rental properties: -36%
Average cost of rent: £2,169
Westminster
Number of rental properties: -32%
Average cost of rent: £3,169
Hammersmith, Richmond upon Thames and Lambeth have suffered similar, significant drops in rental properties.
These changes are pushing Generation Rent further and further away from the centre of the city.
“While there is less stock in London, landlords haven’t gone away,” research analyst David Fell explained.
“Over the year, their interest has steadily rippled out from the centre of the capital. In a bid to find better yields and cut their stamp duty bill, investors who had been buying in central London are now looking in outer London,” he said.
“And some landlords who had been operating in the capital’s outskirts are now looking outside London.”
Today’s stats appear to support Fell’s theory - the number of available rental homes has actually risen in more remote London boroughs over the past year, while rents remain much lower than the average.
In areas like Havering (Zone 6), Bexley (Zone 6) and Haringey (Zone 2/3), the number of rental homes on the market has increased by up to 12% since 2016, while average rents are as low as £1,100 a month.
Havering
Number of rental properties: +15%
Average cost of rent: £1,168
Haringey
Number of rental properties: +15%
Average cost of rent: £1,611
Bexley
Number of rental properties: +14%
Average cost of rent: £1,110
According to the research, over half of London-based landlords bought property outside of the capital in September, with the average home located 38 miles away from the city.