The number of rental properties on the London housing market dropped 38 per cent over the past year as tenant enquiries only grew by nearly two thirds over the same period.
Estate agency Chestersons said the data, which it has collected and compared between July 2021 and July 2022, was “staggering”.
It said it highlights the imbalance of rental properties falling in number, while tenant enquiries have increased by 60 per cent.
The data also showed there were 45 per cent fewer landlords willing to lower their asking rents compared to the same month last year.
Chestertons put this down to the market imbalance, which is driving tougher competition and further rent increases.
“We continue to see tenants who are really struggling to secure a property in London due to the sheer volume of tenants that are fighting over each new rental property that comes onto the market,” said Chestertons managing director Richard Davies.
“To try and avoid further disappointment, many tenants are offering to pay landlords more rent than they are asking for, but even this isn’t guaranteed to work.
“Given the drop in rents that landlords faced during the pandemic; some by as much as 30 per cent; we are now operating in a landlord driven market.”
Data published by the Office for National Statistics earlier this week also found private rental prices paid by tenants in the UK increased by 3.2 per cent in the 12 months to July 2022, representing the largest annual growth rate since the government department began collecting the data in January 2016.
Private rental price growth in the UK increased during the latter part of 2021 in all regions except London. But this year, London's rental growth has begun to increase.
This week, Renters’ Rights London called on landlords to freeze rents in response to rising energy prices after it was reported that energy bills for the typical UK household are set to reach £4,266 annually.
But landlords are also feeling the squeeze, which is why many are reluctant to freeze or reduce their rents.
As the Bank of England continues to increase the base rate, landlords face rising mortgage interest rates. This, some say, has put pressure on them to increase rents.
Policy and campaigns director at the National Residential Landlord Association, Chris Norris, said there is a “strong possibility” most landlords will eventually have to face higher credit costs.