Some parts of London have recently seen rents on properties fall by around 20%, after a surge in properties going up for rent resulted in greater supply than demand. It has not been long since reports indicated that rents in the area had actually be rising by up to 8% a year, with landlords making the most of consumer desperation to find a rented home given that many could not get a mortgage in order to purchase their own property. However, this now seems to be turning itself around, with rentals being slashed by hundreds of pounds a month in some cases.

One of the problems with rental properties at the moment is that many homeowners are unable to sell their homes because of the severe slowdown in the housing market, and this means that many people are unable to sell their homes. As a result of this an increasing number of people are putting their properties up for rent, which has resulted in an increase in the number of rental properties coming up on the books, which means that supply has out-stripped demand.

One industry official stated: ‘We have noticed a huge increase in stock in the last three to four months, while inquiries have increased only marginally.’ As an example one landlord had to cut the weekly rent on a London flat from £2700 a week to £2000 a week in order to let the property. Many landlords could end up losing hundreds of pounds every week on the rent that they charge on a property in the London area, but many will still have to cut the rent in order to remain competitive as a result of the rising number of properties coming onto the market.

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