The cost of renting in London has climbed by hundreds of pounds a month, research from lettings and estate agent Benham and Reeves shows.
This is due to dwindling rental stock levels and could continue to do so if the issue is not resolved.
Benham and Reeves analysed both the change in available rental stock across the London market in the last year, as well as how this has impacted the cost of renting across the capital.
Across the whole of London, the number of available rental properties listed on the market decreased by 48% between Q3 2020 and Q3 2021. At the same time, the average cost of renting has increased by £109 per month.
Only the borough of Barking and Dagenham saw the level of available rental stock increase, up 1%. The average cost of renting in the borough has also increased by an average of 1%.
The rest of London, however, has seen the level of rental stock fall by between 10% to 30% year on year. The average cost of renting has climbed by 4%, which Benham and Reeves reports is an increase of £49 per month for the average tenant.
The average monthly rental cost has increased £95 per month in boroughs where rental stock has dropped between 30.1% and 50% compared to last year, resulting in a 6% increase in the average cost of renting.
In 10 London boroughs, the level of available rental stock currently on the market has more than halved in the last year. The cost of renting across these worst-hit boroughs has climbed by 9% on average, equating to a rental increase of £179 per month.
Marc von Grundherr, Director of Benham and Reeves, comments: “Restrictions imposed as a result of the pandemic saw demand for London rental properties evaporate almost overnight and many landlords were forced to dramatically reduce their rental income expectations simply to secure a tenant.
“However, we’ve seen waves of tenant demand return to the capital as social and workplace restrictions have been eased but while this demand is starting to snowball, the level of available rental stock remains notably lower than it was a year ago.
“As a result, the cost of renting has climbed quite considerably in many boroughs, with tenants now paying hundreds of pounds more a month as a result. Should stock levels remain muted, there’s no doubt that this upward trend will continue and the cost of renting in London will climb even further.”
The year on year decline in rental stock levels and the average change in the monthly cost of renting
|No. Boroughs||Decline in rental stock levels (Q3 2020 vs Q3 2021)||Change in Average Monthly Rental Cost (%)||Change in Average Monthly Rental Cost (£)|
|6||10% to 30%||4%||£49|
|16||30.1% to 50%||6%||£95|
|10||50.1% or more||9%||£179|