Renting in London costs 82% more, says HomeLet

Tuesday 19th June 2012

The average cost of renting a home in Greater London is now 82% more expensive than the rest of the UK – the highest difference ever seen, according to new research.
 
The May 2012 HomeLet Rental Index shows tenants are now paying an average of £1,187 a month to rent a home in the capital – compared with tenants in the rest of the UK who are paying an average of £653 per month.
 
Over the last three months the average UK rental amount, excluding Greater London, has decreased by 1%.

Homelet says Greater London has bucked this trend with a 2.5% increase in rents. However, rents in prime central London have dipped due to ‘deflated demand’, according to Knight Frank.

The agent says that rents fell 0.3% in May, reversing a 0.1% rise in April. New tenant registrations were down 8% and property viewings down 7% in the three months to May compared to the same period last year.
 
Knight Frank says that rents in prime central London have fallen in seven out of the last eight months, and are now just 02% higher than in May last year.

Its report says that while supply is rising, demand is failing to keep pace – a reflection of continued uncertainty in the city employment market.

Knight Frank says this is most evident in the mid-market – notably properties with two or three bedrooms in the £1,000 to £2,000 per week bracket – due to the fact that it is the mid-level city jobs that have been most affected by cutbacks.

“With the ongoing troubles in the Eurozone and associated uncertainty in the finance sector, there is little sign of this reversing in the coming months,” observes the firm.

It also says that short-let rental demand has not materialised, and was in effect removed by LOCOG, the London Olympics Organising Committee, releasing a further 600,000 hotel room nights which were previously set aside for officials and the media but are no longer required.