Overview of average rents in London
According to Homelet, the average rent in London in October 2024 was £2,211 (approx. R20,000) Compared to the same period last year, the average rent in London has increased by 0.9 per cent, showing a slight growth trend. In addition, monthly rents in London rose by 0.5 per cent in October compared to September, achieving a third consecutive month of increases, signalling a strong performance of the rental market in the peak season.
Differences in rental increases across London
Within London, there were significant differences in rental increases across different areas. The report notes that Harrow and Hillingdon has seen the largest annual increase in rents in London, rising by 16.1 per cent. Meanwhile, Brent has seen the biggest increase in rents over the last five years, up 45.1 per cent.
However, not all London boroughs have seen rents rise. For example, the average monthly rent in Westminster is £3,384, but has fallen by 5.2 per cent per annum; the average monthly rent in Hammersmith, Fulham, Kensington and Chelsea is £2,647, an annual fall of 5.7 per cent; the average monthly rent in the Camden, City of London area was £2,505, an annual fall of 7 per cent.
Comparison of UK-wide rental data
On a UK-wide basis, the average rent in the UK was £1,327 per month in the year to October 2024, up 3.4 per cent year-on-year but down 0.3 per cent year-on-year. Notably, excluding London, the average rent in the UK fell to £1,119 per month, suggesting that London's rent levels are having a significant impact on average rents across the UK.
Details of rents in London districts
Below are details of rents in some of the key areas of London:
- Westminster, a prominent area in West London - average monthly rent of £3,384, an annual fall of 5.2 per cent.
- Wealthy areas of West London, the location of a number of luxury homes - Hammersmith, Fulham, Kensington & Chelsea (Hammersmith, Fulham, Kensington and Chelsea): the average monthly rent of £ 2,647, an annual decline of 5.7 per cent.
- Central London - Camden, City of London: average monthly rent of £2,505, down 7 per cent a year.
- Powerhouse East London - Tower Hamlets: average monthly rent of £2,422, down 0.4 per cent.
- Royal Borough of South East London - Bexley and Greenwich: average monthly rent £1,769, up 1.2 per cent.
Ranking of London's rental growth rates
London's top five areas of annual rental growth are: Harrow (Harrow and Hillingdon), Brent (Brent), Bromley (Bromley), Merton (Merton, Kingston upon Thames and Sutton) and Redbridge and Waltham Forest (Redbridge and Waltham Forest).
Tenants' burden
As rents continue to rise, tenants in the UK are facing increased financial pressures. Figures show that the average UK tenant pays 32.8 per cent of their income towards rent, up 0.1 per cent year-on-year. In London, the percentage is even higher, with tenants paying an average of 39 per cent of their income towards rent, up 0.2 per cent year-on-year.
In conclusion, despite the recent increase in activity in the UK property market due to policies such as interest rate cuts, the rental market has been relatively more stable. For the whole of last year, UK house prices fell continuously while rents maintained steady growth; this year, house prices have rebounded but rents are less volatile. In the future, as the market environment continues to change, the rental market in London and across the UK may usher in new opportunities and challenges.
