Supply and demand disparity fuelled by landlords exiting the market drove up average rental prices by 4.9% across the UK in the 12 months to the end of March. However, rental costs for the most in-demand smaller properties are rising at faster levels than rents for larger homes in half of London's boroughs.
In many areas, limited supply is forcing prospective tenants to compete for properties, driving up rents and making flat-hunting stressful as multiple people bid for the same home.
The analysis of the most recent ONS data suggests that people who want to live alone, or in a couple, are seeing even greater price increases than those seeking bigger properties in 16 out of 32 London boroughs. This is likely to have a disproportionate impact on younger people and those without children, who tend to search for one-bedroom properties.
In Kensington and Chelsea, the average cost of renting a one-bed property has risen nearly five times faster than the average rent for a three-bed property. The monthly cost of renting a one-bedroom home in the area has risen by 9.7% on an annual basis to £1,950, while that of a three-bed home has risen by just 2% in comparison.
Research by Gravity Co highlights the urgent need for more homes to rent around the capital, including purpose-built rental accommodation. Co-living build-to-rent developments can significantly boost supply, giving would-be tenants more choice at a fixed price, and sparing them the stress of having to outbid others in order to find a home.
Riccardo Tessaro, Co-Founder & CEO of Gravity Co, comments:
“The shortage of one-bedroom flats in some parts of London is impacting young and single people more than most, making it even harder for them to find a home of their own.
“Not everyone wants to buy a home, or is in a position to, so it is vital that there are adequate rental properties available in the UK.
“Build-to-rent developments, which provide homes for a great number of people on one site, don’t just offer a comfortable and safe place to live — they can help build communities too.
“Our offering provides instant access to a social network for our members, helping them make new friends and build work connections. Members also pay just one simple monthly amount, which includes all their utility bills — which makes budgeting easier during the cost-of-living crisis.”