The average cost of renting a home in Greater London is now 87.8% more expensive than the rest of the UK – the highest difference ever seen, according to new research.
The September HomeLet Rental Index
shows renting a home in Greater London is 6.3% higher than the same time last year (when comparing Q3 of 2011 with Q3 in 2012), and now stands at £1,273 a month – which is another all-time high cost for tenants living in a rented home in the region.
This is a stark contrast to the cost of renting a home around the rest of the UK - excluding Greater London - which saw rents increase by just 1.4% during the same period to an average of £678 a month.
However, the Capital’s increase has driven up overall average rents for the whole of the UK to the new record cost of £808 a month, despite costs only rising in Greater London and the East Midlands.
Ian Fraser, HomeLet’s Managing Director, said: “We do generally see a dip in average rents at this time of the year. We’ve found the main reason for this is average rents are inflated over the summer months as more students secure their homes in time for the next academic year. By autumn this activity begins to decline and rents start to dip.
“As student properties tend to house a high number of tenants, their combined payments are typically higher than family homes. So as students now settle into their new homes, we may see rents decrease as we reach the end of 2012, and then rise once again in early 2013 when activity in the rental market begins to pick up once again.
“However, rents in Greater London have continued to buck the national trend. According to Boris Johnson this week, the combination of competition for housing from wealthy foreign buyers and rich City workers, along with a lack of available credit to purchase their own home, seems to be taking its toll on working ‘middle-class’ families in Greater London, who he feels are being squeezed out of the property market.
Ian continue: “As a result these middle class families are left with no option but to rent, which leads to increased demand and prices within the private rented sector, particularly in the Capital. But with the average tenant in Greater London earning an average 2.6% less than they did in September 2010, this is an issue that certainly needs addressing, as these families could also be priced out of the rental market too.
“Just 12 months ago, the difference in rents between Greater London and the rest of the UK, was 53%, and in 2010 an even smaller 40%. It’s astonishing to see how this gap has more than doubled over the past two years, and I believe it won’t be long before rents in the Capital are at least double the UK average.”