London rent up 20%

Prices for rental property in London have seen dramatic increases over the last nine months, according to estate agents Foxtons.

Since the collapse of Northern Rock and beginnings of the credit crunch, the property market in the UK has become increasingly uncertain, prompting many to stay in the rental sector.

This has forced up demand for rented property, with prices following suit.

"Without doubt we've seen rental prices go up in the last nine months or so since last summer," said Ed Phillips, lettings director at Foxtons.

"Prices have gone up between ten – twenty per cent on new tenancies and even renewals have gone up by approximately seven per cent."

Research released by the Halifax bank earlier this month finds house prices fell 1.3 per cent in April, and were down year-on-year for the first time in over a decade.

This uncertainty has led potential homebuyers, especially first-time buyers, to bide their time and wait for the market to cool further.

"This is essentially down to the factor of more people needing properties than there are properties available. Despite the doom and gloom about the current economy there are still high volumes of people moving to London and relocating here," said Mr Phillips.

"It is sometimes this group of people and others who would have considered buying a property last year but are now waiting to see what happens with the market."

In some areas, though, it is not too difficult to secure a suitable property for rent.

"On average there are have about four to five applicants for each property, so we are seeing things go quickly," continued Mr Phillips.

"The levels of business so far this year [at Foxtons] are more in line with what we would expect to see in the typically busiest time of year between April and November," he concluded.

Chris O'Toole