The April 2013 HomeLet Rental Index shows the average cost of renting a home in Greater London is 4.8% higher than the same time last year. At an average £1,236 per month, renting a home in the Capital is still more expensive than anywhere else in the UK, and a significant £100 more a week than in the South East.
However, data from this month’s HomeLet Rental Index also shows the average cost of renting a home in the Capital increased by 8.1% from April 2011-12 and a significant 9.3% from April 2010-11. Therefore the most recent increase (of 4.8%) is almost half of what it was two years ago.
When the Greater London figure is removed, the average cost of renting a home around the rest of the UK decreased by 0.2% over the past year to £659 per month. It is now 84.2% more expensive to rent a home in Greater London than the rest of the UK (excluding Greater London). This is the lowest difference since December 2012 (when it was 82.3%).
Ian Fraser, HomeLet’s Managing Director, said: “The combination of lower income and increase in average rents within Greater London could be a result of two factors. Firstly the increase in the amount of people moving into a rented home may have created more buoyancy within the lettings market in Greater London, and helped to keep average rents at a more stable level than a few years ago when they were increasing at very high rates.
“Secondly, the lower rate of increase could be a sign that people simply cannot afford to pay such high rents. This month’s data shows tenants in Greater London are earning 2.5% less than they were during the same time last year. Therefore, landlords and lettings agents may be now more willing to negotiate rental amounts.“The lettings industry has been under much scrutiny recently, and the Government’s decision to make it statutory for lettings agents to sign up to an ombudsman scheme, shows how the industry is developing and becoming a way of life for many people.
“The Capital’s stabilising rents could also reflect how the lettings industry is increasingly being seen as a long-term family solution. The private rented sector is no longer a housing stop-gap for our nation, and with the Government now focussing on building houses to rent, I believe will not only benefit tenants, but also landlords and lettings agents who will welcome increased housing stock – and overall confidence – within the sector.”