London rents increased in the three months ending June, new figures show, as housing affordability continues to decline.
Average London rents were 4.5 per cent higher over the period compared with the same period last year, according to figures released today from Rightmove.
UK rents excluding London climbed 4.2 per cent.
Rightmove’s head of lettings Sam Mitchell said the rises were fuelled by demand outstripping supply in many of the sought-after areas, especially in the East of England and the more affordable areas of London.
As the economy has recovered over the last year demand has climbed. This can be seen by a 52 per cent annual increase in the number of email enquiries across the UK, Rightmove said.
It comes after figures released yesterday by the Office for National Statistics revealed that house prices were up 5.7 per cent year-on-year in May.
They grew by less in London where prices increased 4.7 per cent. Other numbers suggest people are having difficulty buying. The number of mortgages given for home purchases was just 49,000 in May, down 15.8 per cent on the year, data from the Council of Mortgage Lenders (CML) showed yesterday.
CML director Paul Smee expects the number of mortgages to recover gradually. However, he added: “we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings which will work in a contrary direction.”
The CML figures also reveal that first-time buyers are paying their lowest mortgage costs relative to their income since 2005. However, affordability checks and hefty deposits are weighing on purchases.