The average London rent has hit £2,000 a month
Jun 21, 2023
London remains the region with the fastest growing rents - up 13.5%. It means people are spending more of their wages on rent than at any other time in the last 10 years, according to property portal Zoopla.
The average rent in London has reached £2,000 per month and has increased by £490 a month after Covid lockdowns.
In the UK to April 2023, the average cost of a new let rose to £1,126 per month. The average UK rent has now increased by £110-a-month - or 10.4% - since April 2022. This level of rental inflation is high by historical standards and ahead of average earnings growth, which is currently at 6.5%.
THE CHEAPEST AND MOST EXPENSIVE AREAS TO RENT IN LONDON
• The cheapest area to rent in London is Bexley at £1,426 a month. The most expensive is Kensington and Chelsea at £3,538 per month.
WHERE RENTS ARE RISING THE FASTEST AND SLOWEST
• At present, the largest annual increases are recorded in the eastern boroughs of Newham (+18.1%), Greenwich (+18.0%) and Tower Hamlets (16.5%).
• Those living in the suburbs and western edges of central London are seeing a smaller level of rental growth.
• The annual rental inflation is weakest in Kensington and Chelsea (10.2%), Havering (11.3%) and Richmond (11.4%).
PRICES OF NEW LETS IN INNER LONDON START TO SLOW DOWN
The good news for many renters is that the rate of rental inflation is slowing down in inner London. The monthly rent for a new let in inner London is only £26 higher today than it was in January 2023. This is an indication of prices hitting their ceiling in this area, as renters struggle to afford higher rents.
Prices of new lets are growing at a much faster rate in suburban boroughs. Over the last quarter, rental prices in outer London increased by 3% - or £47 - per month. These more affordable areas are now attracting more demand from renters looking for cheaper alternatives to inner London.
AFFORDABILITY SHOCK
The pressure of rising mortgage rates faced by landlords, as well as higher demand for properties than the number made available, have combined to raise rents. Tenants on a fixed rent would not have seen a difference, those signing up to new contracts, or moving to a different property are likely to have seen big increases.
The chunk of income taken up by rent varies in different regions. Even in London, where rent has previously taken up a bigger proportion of wages, the cost still accounts for 40% of gross earnings - the highest in the UK.
A small rise in percentage terms can still have a significant effect on people's finances.
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