New rents in London have risen by 2.5% this August compared to the same time last year, referencing firm Homelet has reported. This follows three successive months of decline.

The average monthly rent in the capital is now £1,609.

Across the UK, Homelet’s data reveals that the average monthly rent for August stood at £939. That’s a 2.4% increase on an annual basis, and the highest rate of annual inflation since last November.

Estate Agent,Your Move, blames rising rents on the fall of rental stock available. The 3% Stamp Duty surcharge on the purchase of buy-to-let properties combined with changes to tax relief for private landlords are reducing the number of rental properties on the market.

Richard Waind, director of Your Move, said, “We are now starting to see the real impact of the Government’s stamp duty revision, plus the additional tax changes which have hit landlords hard. The outcome has been a decline in the number of rental properties on the market and this has had the effect of pushing up prices for tenants.”

He went on to add, “Tenants in London face a different issue as rapidly rising travel costs are increasing the overall cost of living in the suburbs, despite rents generally being cheaper than central areas.”

For example, the average property in Travelcard Zone 2 cost tenants £1,831 a month compared to a typical price of £1,161 in Zone 4. Yet high travel costs mean the price benefit of living in the outskirts of London has been reduced.

For corporate tenants moving to London, understanding the trade-off between location and travel costs can come as a shock. Experienced Dwellworks consultants have invaluable experience of areas that represent the best value for money while keeping travel costs to a minimum.