London Rent Gap Widens to 80% More Than the Rest of the UK

The rent gap between London and the rest of the country means tenants are paying an average 80% more to let a home in the capital.

Rents in London hit an average £1,177 per month in November – while average rents elsewhere were £653 a month, according to a report from buy to let insurer HomeLet.

The rise makes London rents 13% higher than the same period last year, while those in the rest of the UK have nudged up just 1.6%.

Rent increases are patchy around the country – from just 0.2% in the North West to 6% in East Anglia. Landlords in the North East and Scotland have seen their rents drop by around 2% over the year.

HomeLet managing director, John Boyle, said: “The soaring cost of renting a home in the capital, compared to the rest of the UK, reflects how demand for rental properties is increasing due to people’s continuing struggle to get onto the property ladder.

“Combined with the current Eurozone issue, this economic uncertainty could result in the demand for rental properties increase, and cause rental amounts to soar even further. Traditionally demand for rented homes dips before Christmas – however, London is bucking this trend and demand is higher than ever.

“This demand offers a fantastic opportunity for landlords and property investors who could offer a much needed supply of rental properties to the industry.”

The report also reveals some information about tenants:

• The average tenant age in November is 33 years and nine months – the highest average age on record
• Average tenant incomes were £27,599 in November – an increase of just 1.7% compared to November 2010

Looking forward, Boyle said: “Rents could continue to rise further in 2012, particularly because of an increase in short-term high value lets in the run up to the Olympic Games, but it’s important to remember how delicate the balance of supply and demand can be.
“While the games will exacerbate demand, the Olympic Park Legacy Company estimates that the Olympic Park could create up to 11,000 new homes in London. Even though house prices are likely to remain unaffordable for many people, this injection in stock and potential investment properties could be the catalyst that slows demand for rented property in late 2012.”