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UK Rents Climb a Third above pre-COVID Levels as Tenant Demand Remains Firm

LONDON, July 21 (Reuters) - Advertised rents in Britain increased at a faster pace in the three months to June and annual rental growth remained high, reflecting strong demand from tenants and wider tensions in the housing market, a survey showed on Friday.

Property website Rightmove said the average advertised rent for new tenancies outside London rose 3.5% in the second quarter of 2023 to 1,231 pounds ($1,584) per month - a bigger increase than the 1.5% rise in the first quarter of the year.

Advertised rents are 9.3% higher than a year ago and 33% more than in 2019, before the COVID-19 pandemic.

London has much higher average rents at 2,567 pounds per month for new tenancies, but a similar trend of increases, with rents up 2.6% on the quarter and 13.7% higher than a year ago.

Tim Bannister, Rightmove's director of property science, said the big increase in rents since the pandemic reflected a significant surge in demand from tenants and contrasted with stagnant rents from 2015 to 2019.

"The number of available properties to rent continues to improve compared to last year's record low levels ... though with a long way to go to catch up with pre-pandemic levels of stock, there will continue to be more tenants looking to move than properties for them to move to for a while yet," he said.

Rightmove said there were 7% more properties available for rent than a year ago, but 42% fewer than in 2019.

Britain's housing market has been hit by rapid increases in interest rates, which investors think could peak between 5.75% and 6% later this year, prompting some landlords to sell up - especially as regulation of the sector is increasing too.

Rightmove said 16% of properties for sale were previously on the rental market, up from 13% in January 2019.

Tenant demand was 3% higher than in the same period in 2022 and 42% higher than 2019, Rightmove added.

($1 = 0.7771 pounds)

Reporting by Suban Abdulla; editing by David Milliken

Source: Reuters

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