London’s Renting Crisis: Skyrocketing Costs Puts Tenants Under Pressure

Soaring Rents in London: A Struggle for Tenants

The analysis reveals that renting in London has become significantly more expensive, with an increase of £559 per month in just four years.

The average asking rent in the capital during the second quarter of this year reached £2,567, rising from £2,008 in the spring of 2019.

This surge of nearly 28 percent occurred amidst the backdrop of the Covid-19 pandemic, Brexit, and a prime ministerial merry-go-round.

Inner London’s Escalating Rental Costs: Inner London now boasts an average monthly rent of £3,059, which amounts to £36,708 per year—nearly the same as the average pre-tax salary in London.

For those earning £80,000 annually, the rent in inner London would consume about two-thirds of their take-home pay.

Outer London Tenants Also Struggle: Tenants in outer London have not been spared from the rent hikes either, with typical listings now standing at £2,206, marking a 14 percent increase from the previous year and a staggering 30 percent increase over four years.

Top Five Areas Witnessing the Highest Rent Increases: Whetstone, Barnet, has experienced the most substantial price growth over the past year, with average rents rising by almost a third to reach £2,047 in the second quarter of 2023.

Wembley and Tottenham secure the second and third spots for the fastest-rising tenancy costs in the last 12 months.

Factors Driving the Rent Surge: Leila Parsa, assistant head of lettings at Hamptons in Whetstone, attributes the surging demand in the area to its London version of St. Albans feel, a friendly atmosphere, vibrant community, and green spaces, which attract young families, professionals moving from inner London, and overseas corporate tenants from places like Hong Kong.

Affordable Alternatives Remain Limited: While rents continue to skyrocket in most areas, some pockets of relative affordability persist predominantly south of the river.

West Wickham and Biggin Hill in the borough of Bromley emerged as the cheapest places to rent, with Chadwell Heath representing the only north London location in the top five.

The Rental Market Landscape: Although the gap between rental home supply and demand has slightly narrowed nationwide, property availability is still 42 percent below 2019 levels.

This scarcity of rental properties is pushing rents higher.

Additionally, landlords are grappling with government sentiment, rising taxes, and compliance requirements, resulting in more properties previously rented now being put up for sale.

Conclusion: With a long way to go before pre-pandemic stock levels are reached, the demand for rental properties in London continues to outstrip supply.

As tenants grapple with the burden of soaring rents, it remains crucial for landlords to establish lasting relationships with good tenants, as many tenants are choosing to stay in their rented properties for more than two years.