The HomeLet Rental Index shows the average cost of renting a home near the Olympic village in East London, during the first quarter (Q1) of 2012, increased by almost 9% to £1,178 per month.
The average annual increase for the whole of Greater London was just over 5% during Q1, which despite being higher than the UK average, shows rental prices in the Olympic area of London are increasing faster than anywhere else in the country.
Tenants join forces to combat high rent
Whilst rents in the capital have grown over the last 12 months, tenants’ income in the same period has only risen by 3% to £37,010. After income tax and National Insurance, this increase means tenants in Greater London have approximately £410 less disposable income every year.
Combining this with inflation standing at 4%, increasing fuel bills and rising costs in the supermarkets, it seems more tenants are opting to share their home – over the past year there’s been an 11% increase in the average number of tenants sharing a property in the capital.
Meanwhile, since last month, the UK average cost of renting a home, outside Greater London, decreased marginally by 0.2% to £660 per month – taking it back to the same rate as last year. This means rents in the capital, which stand at £1,178, have now stretched to being 78% more expensive than the rest of the UK according to data from the HomeLet Rental Index.
Ian Fraser, Managing Director of HomeLet, says: “The increase in rents, coupled with high levels of inflation, is really causing a strain on the affordability of rented homes in Greater London. The reality for many people is that renting a property on their own is simply not an affordable option.
“We can also see the impact of regeneration of East London in preparation for the Olympic Games. This area of London has seen an above average increase of almost 9% in rental values in just one year. Whilst our data shows tenancies arranged through letting agents, it’s likely unreported shorter-term privately agreed tenancies over the summer will inflate rents to record levels in East London.
“The Olympics could create 11,000 new homes, which may help to ease demand for rented properties in the area. However, with house prices remaining unaffordable for many people, even this injection of housing stock may not have a lasting impact on rental prices in the capital, which will continue to rise for the foreseeable future.”
HomeLet is the UK’s largest supplier of tenant referencing to the lettings industry. The HomeLet Rental Index shows newly agreed rental prices in the private rented sector from over 3,000 letting agents each month. The HomeLet Rental Index has access to the largest volume of data on agreed rental amounts in the UK and shows agreed rental amounts rather than advertised rents.
To read the full report visit The HomeLet Rental Index page on our website