The December HomeLet Rental Index shows the average cost of renting a home in the Capital – the most expensive UK region - increased by 6.9% against the same time last year to £1,212 per month. In contrast, average rents in the North East increased by a minimal 0.8% to £523 per month – and has consistently remained the least expensive region in the UK to rent a home.
Average rents within the 12 areas within Greater London range from £779 per month in Dartford, to £1,689 per month in West London. When comparing West London’s rental amounts with those in the North East of England, they’re a significant 223% more expensive.
Around the rest of the UK, the average cost of renting a home increased by 4.7% from December 2011 to £782 per month. This is contrary to the average income of tenants that decreased over the same period by 0.3% to £27,799 per annum.
Ian Fraser, HomeLet’s Managing Director, said: “The high level of overseas investors in London’s property market has helped to drive property prices up, particularly for residential homes in the more exclusive boroughs. But the growing demand for rented property throughout the Capital is really driving an increase in rental values – with rising rents offering an increasingly attractive return for those who have the capital to invest in property.
“As confidence and demand in the private rented sector grows, so will overseas investment, and landlords will continue to maximise the return from their properties. However, this may also increase the purchase value of homes within these areas, and consequently affect people’s ability to become a home owner…thereby driving demand for rental homes, and average rents, even higher.
“The Government has pledged to ease this situation by offering funding and introducing schemes to aid the development of new homes - specifically for private rent. Until then though, it appears rents in Greater London will continue to increase at a much higher rate than in other regions, such as the North East - and those who want to live in desirable locations, due to employment for example, may have to remain in rented homes due to inflated property values pricing them out of the ownership option.”
To view a summary of the December HomeLet Rental Index visit our Rental Index pages.