Stratospheric London rents 78% dearer than rest of UK
The cost of renting in London has continued to shoot up, particularly near the Olympic Village, while rents outside London have barely changed, dipping by 0.2% to an average of £660 per month – the same as last year, says HomeLet.
At £1,178, the average rent in the capital is now 78% more expensive than the rest of the UK.
The latest HomeLet rental index also says that there has been an 11% increase in the number of people sharing a rental property in London, which it says suggests that tenants are really struggling with increased living costs.
The index shows that the average cost of renting a home near the Olympic village was up by almost 9% on the same period a year ago to stand £1,178 per month during the first quarter of 2012.
The average annual increase for the whole of Greater London was just over 5% in the same period.
While rents in the capital have grown over the last 12 months, tenants’ income in the same period has only risen by 3% to £37,010.
After income tax and National Insurance, this increase means tenants in Greater London have approximately £410 less disposable income every year.
Ian Fraser, managing director of HomeLet, said: “The increase in rents, coupled with high levels of inflation, is really causing a strain on the affordability of rented homes in Greater London. The reality for many people is that renting a property on their own is simply not an affordable option.
“We can also see the impact of regeneration of East London in preparation for the Olympic Games. This area of London has seen an above average increase of almost 9% in rental values in just one year.
“Whilst our data shows tenancies arranged through letting agents, it is likely that unreported shorter-term privately agreed tenancies over the summer will inflate rents to record levels in East London.
“The Olympics could create 11,000 new homes, which may help to ease demand for rented properties in the area. However, with house prices remaining unaffordable for many people, even this injection of housing stock may not have a lasting impact on rental prices in the capital, which will continue to rise for the foreseeable future.”
Separate data from the Scottish lettings portal Citylets has shown that the average rent in Scotland has gone up by 2.6% this year to stand at £664.
Article courtesy of Letting Agent Today Sign up for LAT newsletter 22-May-12General Lettings News