The December 2013 HomeLet Rental Index shows the average cost of renting a home in the Capital reduced by 1.5% during December to £1,244 per month. This is currently 148.3% more expensive than in the North East where average rents lowered by 3.1% to £501 per month.
Greater London’s monthly decrease means average rents in the Capital are at the lowest amount since September 2013, and the annual rate of growth of this figure has slowed from 7.6% (when comparing December 2011-12) to 2.1% (when comparing December 12-13).
Around the rest of the UK, the latest HomeLet Rental Index shows the average cost of renting a home is currently £813 per month after increasing by 0.9% during December. When the Greater London figure is removed, the average cost of renting a home in the UK increased monthly and annually by 1.7% and 1.9% respectively to £684 per month.
Gary Abraham, HomeLet’s Sales and Marketing Director, said: “Despite London rents stabilising, they’re still significantly more expensive than anywhere else in the UK – particularly those in the North East, where average rents are lower than in any other region.
“Although rents in Greater London are much higher than in any other region – even in the second most expensive region, the South East, where the Capital’s average rental costs are 49.5% more expensive - it does appear the property bubble within the region may be beginning to deflate. In September, the difference between renting a home in Greater London and the rest of the UK (when the Greater London figure is removed) was 92.2%. This has reduced month by month since then to 81.9%, as published in this month’s HomeLet Rental Index.
“Looking ahead this year, I believe rents in the Capital will begin to increase again as the summer months approach – however, not at the same rate as previous years when the property market was affected by lack of borrowing and mortgage availability before the Funding for Lending and Help to Buy schemes were introduced.
“The private rented sector is the preferred lifestyle choice of many more people now, and the Government has put further plans in place to ensure the market not only provides quality homes, but is also an affordable and reliable option for those who decide to rent.
“I believe there will always be a clear divide between the southern and northern regions with regards to rental amounts – however, with the property market now seeing much more movement, London rents may continue to increase at a lower rate than seen over the past three years – particularly between December 2009-2010, when average rents in the Capital increased by 13%.
“In my opinion, 2014 will be a less volatile year in terms of changes in rental amounts – however, it will remain buoyant, with costs increasing in-line with property and inflation rises.”
You can view a summary of the December HomeLet Rental Index, which this month focuses on the quarterly rental amounts within the boroughs of Greater London, on the Rental Index pages of our website.