9:24 AM, 28th April 2023, About 10 months ago 2
Renters in the capital are paying 37% or £613 more per month than official statistics suggest, research reveals.
The findings from lettings and estate agent, Benham and Reeves say that high demand is pushing up rent prices – and creating a ‘reality gap’.
That’s because official figures from the Office for National Statistics (ONS) show that average London rents are currently £1,672 – up 4.7% in the last year.
But the agent’s research shows that the average asking rent of properties in London currently is £2,285 – which is £613 higher than the ONS figures.
Marc von Grundherr, a director of Benham and Reeves, said: “The London rental market is performing incredibly well at the moment.
“Demand is high with students and city professionals returning to the capital after the pandemic.
“Furthermore, foreign buyers are using the rental market to try before they buy, and this is adding an additional layer of demand.”
He added: “However, many people may be entering the market with an unrealistic expectation of just what and where they can afford to rent despite having researched the market beforehand.
“This is down to the fact that government rental data is lagging behind the reality of current rental prices, essentially showing yesterday’s prices instead of today’s.
“As such, many renters are finding they simply don’t have the budget to secure a rental home in what is currently a very competitive market.”
Mr von Grundherr said: “With an average rental reality gap of £613 per month, those looking to rent need to ensure they either have enough to cover the higher than expected costs or accept the fact that they are going to have to extend their search to slightly more affordable areas.”
The research shows that the biggest rent price reality gap is in the City of London where, at £3,606 per month, the real cost of renting is £1,702 higher than that stated by the ONS.
In Kensington and Chelsea, the reality gap is £1,333, while in Westminster it is £1,264.
The rental reality gap also surpasses £900 in Wandsworth (£904), Camden (£903), and Hammersmith and Fulham (£901).
London’s smallest rental reality gaps are found in Redbridge (£240), Bexley (£248) and Harrow (£298), although tenants can still expect to pay more than they may have budgeted when researching the market.
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