Average rents for a newly let property in London fell 4.5 per cent in June on an annual basis, which is the most dramatic decline Hamptons International has recorded sine its records began in 2014.

The estate agent adds that in inner London rents fell 7.4 per cent, pretty much cancelling last year’s growth of 7.5 per cent in the region.

In outer London, meanwhile, rents fell 3.6 per cent.

Hamptons says that this was driven by higher stock levels, of which there was 14 per cent growth in June, combined with a 9 per cent fall in applicant numbers. In London in June there were 3.9 applicants looking for every property, whereas in Great Britain overall there were 6.3.

This sharp fall in London rent drove the average rent on newly let properties to fall by 0.7 per cent across Great Britain as a whole, the first drop seen since February 2014.

This compares to a 3.8 per cent gain recorded in June 2019 and a rise of 1.2 per cent in February this year.

Outside of London, however, the average rent for a newly let dwelling rose 1.3 per cent, with the North West clocking up growth of 5.2 per cent. This gain was followed by the North at 3 per cent, and the Midlands, at 2.9 per cent.

The regional differences can be explained, says Hamptons, by the imbalance in supply and demand.

“The effect of lockdown has resulted in fewer international tenants, particularly students, as well as an increase in the number of London tenants leaving the capital,” says Hamptons head of research Aneisha Beveridge.

“However,” she continues, “the flexibility renting offers has boosted demand in the Midlands and North. Rents in the three combined Northern regions rose 3 per cent in June, six times the rate recorded in the same period last year.”

Beveridge adds: “While the stamp duty changes announced last week are most likely to benefit landlords looking to buy in London and the South, higher yields will continue to entice investors further North. Any additional increase in rental stock in London could put more downward pressure on rents.

“But longer term, the prospects for rental growth in the capital will depend on whether the short-term increase in supply remains, and most importantly, what the lasting economic damage means for rental affordability.”