The February 2013 HomeLet Rental Index shows the average cost of renting a home in the Capital increased by 7.3% - more than any other region - over the past year to £1,242 per month. In contrast, average rents in the North East decreased by 3.3% over the past year to £505 per month.
Around the rest of the UK, the average cost of renting a home increased by 3.9% to £777 per month. The region that saw the largest annual decrease was Wales, after rents lowered by 6.6% to £542 per month.
When comparing income, this month’s HomeLet Rental Index shows tenants in Greater London currently earn an average of £37,000 per annum. This is 63.7% more than those in the North East whose annual income is an average of £23,600.
Ian Fraser, HomeLet’s Managing Director, said: “There is a clear North/South divide within the lettings industry with regards to rental amounts and tenant income. However, even though tenants in the North East earn less than their counterparts in the Capital, it appears they may have more disposable income.
“This month’s HomeLet Rental Index data shows an average tenant renting on their own in the North East pays around 27% of their income towards rent. In contrast, the average rent for a tenant in Greater London would account for a substantial 40% of their income.
“The difference between renting a home in Greater London and the rest of the UK (excluding Greater London) is now 89.9% - the highest on record. With seven of the 12 UK regions already home to rents that are less than half those in the Capital, I predict it will only be a matter of time before rents in Greater London are double the overall average UK amount.
“Strict planning regulations within Greater London make it difficult for new homes to be built within the City. Therefore we may see an increase in the amount of people moving into commuter areas on the outskirts of the Capital, to reduce the amount of money they spend on rent.”
You can read a summary of the February 2013 HomeLet Rental Index by visiting our Rental Index pages.