The average rental price in London has fallen by 3.7% in the year to October 2020, according to the HomeLet rental index.
This is despite the average UK rental price being up 2.2% year-on-year.
However, the data shows that the average rental value in London was noted at £1,603 in October 2020, 95% higher than the average across the rest of the UK at £821.
HomeLet: UK rental prices continue rise
On a regional basis, the South West saw the greatest increase with a 6.2% rise in average rental prices annually. The East Midlands followed, noting a 5.6% increase.
In contrast, Northern Ireland recorded the second largest fall in average rental prices, behind London, with a 2.8% decline.
Martin Totty, chief executive at HomeLet, said: “There’s something strange, though maybe not that surprising happening in the rental sector.
“In the key Greater London area, it is maybe more about demand falling faster than supply leading to depressed rents, whilst in the regions, perhaps the reverse is more typical, with a tightening of stock ‘pinching’ demand and moving average rates gradually upwards. And, against all of this we have the backdrop of a more buoyant sales sector, albeit one with a still uncertain outlook beyond next March.
“For landlords prepared to tough it out, it looks like in most parts of the country, demand is still there, whilst in the capital, equilibrium may seem a little further away.
“At least the government recognise the value of the property sector and the multiplier effect it has on the economy. This time around, that argument now seems unequivocal, with letting agents able to continue ‘business as usual’ while adhering to all COVID safety guidelines.
“Landlords and tenants need each other and for the private rented sector to fulfil the important role it has in the UK housing market, it really needs to be allowed to get on with creating its own market – and find its equilibrium.”