The January 2013 HomeLet Rental Index shows the average cost of renting a home in the Capital is now £1,224 per month. This is a significant 84.9% more expensive than the UK average cost of renting a home, which is now £777 per month.
This month’s HomeLet Rental Index also reveals tenants in Greater London are paying rents that are 139% more expensive than those in the North East, who are living in properties with average monthly rents of £512.
These increases are significantly more than that of the UK consumer price inflation that remained unchanged at 2.7% for the fourth consecutive month in January, according to recently released figures from the Office of National Statistics.
Ian Fraser, Managing Director of HomeLet, said: “Greater London has seen a greater annual increase in average rents than anywhere else in the UK. In contrast, our data shows tenants living in the Capital have only seen their income increase by an average of 0.8%. Therefore when the 6.7% increase in renting a home is combined with the 2.7% increase in inflation, the budgets of tenants in the Capital appear to be strained more than ever.
“Rents do tend to increase towards the summer months, and with an already dwindling supply of properties within the private rented sector, I believe tenants will face even higher increases than normal this year.
“The new ‘bedroom tax’ may also have an impact on demand, as people who face benefits cuts due to the number of spare bedrooms they may have, could move from social housing into the private rented sector. This increase in demand could drive rental amounts even higher, therefore the construction of affordable new homes – both for rental and purchase – is vital to offer a much-needed supply boost to the industry."
You can read a summary of the January 2013 report by visiting our HomeLet Rental Index pages.