New analysis of rent price growth across the capital over the last seven years shows a clear regional divide, with private tenants in east London seeing twice the rate of growth of their west London counterparts, according to the latest Landbay Rental Index, which is powered by MIAC.
Of the nine east London boroughs, the average cumulative rent price growth since January 2012 is 21.41%, with a typical rent now standing at £1,241 per month. Leading the way are Barking and Dagenham (27.66%), Waltham Forest (23.56%) and Bexley (22.02%). The only east London borough that didn’t make it into the top ten areas for rent price growth in the capital was Greenwich, which is still above the London average, at 15.48%.
Contrastingly, the 12 west London boroughs saw average growth of just 10.79% over the period, with monthly rents now a typical £1,456. Towards the bottom of the league table are Kingston upon Thames (8.04%), Richmond upon Thames (6.14%), and Hammersmith & Fulham (5.73%).
However, boroughs in central-west London report even lower growth. Camden recorded an average increase of just 3.78%, while Westminster, and Kensington and Chelsea experienced declines over the period (0.77% and 2.31% respectively).
Nevertheless, when inflation is taken into account (since January 2012, cumulative CPI is 16%), the figures are even starker. In real terms, tenants in 21 of the 33 London boroughs recorded a fall in rent prices. Of these, only one is in east London (Greenwich, at 15.48%). While the vast majority of those in west London have seen declines, just two have witnessed rents rising faster than inflation – Hillingdon (17.12%) and Sutton (16.82%).
Throughout the capital, three-bedroom homes have seen the highest rent price growth over the last seven years, at an average of 10.11%, compared to growth of 9.45% for two-beds and 8.98% for one-beds. This trend has now reversed over the past year – one-beds have recorded an average increase of 0.9% year-on-year, while two-beds have seen 0.83% growth and three-beds a mere 0.34%.
Elsewhere, annual rent price growth in England (excluding London) is at an average of 1.13% – its weakest since February 2013. Scotland is the only country in the UK with improving annual growth, at an average of 1.78% in February this year. The average rent price in the UK is now £1,216 per month, or £772 without London.
John Goodall, the CEO and Founder of Landbay, comments: “We are seeing a cultural shift in London, as demand climbs in the east and traditionally popular areas, like Westminster and Chelsea, slide down the league tables. While part of this is a function of affordability, other things, too, are at play. Rising employment and a thirst for flexible living mean renting is more attractive than ever, with a widening commuter belt in the face of developing infrastructure like Thameslink and Crossrail.”