Cost or renting in London reaches 10-year high

Ryan Bembridge

July 5, 2017

The cost of renting in London is at a 10-year high due to strong demand in the city, Hometrack has found.

Since 2007 average rental values in London have risen by 45% compared to falls of -7% and -4% in the North West and North East.

Jobs growth has been two to three times faster in London than the rest of the UK, leading to inward migration from the rest of the country and overseas.

High house prices and affordability constraints for first-time buyers has also resulted in more people renting.

Richard Donnell, insight director at Hometrack, said: “This new report aims to provide an important long run context for the current trends in rents and rental affordability and what this means as we look forward.

“Rents fell by between 5% and 12% in 2008/09 and this explains why rents in parts of the country outside of London, where rental growth has been subdued, are only just back to where they were a decade ago.

“London has the largest and most liquid rental market. Demand in the capital has been buoyed by employment levels rising 2-3x times faster than other regions, as well as the much higher deposit and household income required to buy making the transition from renting harder than in the past.”

London aside rental growth has started to outpace earnings from 2013 in southern parts of England and the Midlands.

Sign up to our daily email