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Listen nowWhat's happening to the cost of renting in London?
Average London asking rent surpasses £2,500 for the first time
London rents have soared to record levels, with the average tenant now being asked to pay a whopping £2,500 a month for a new let.
The latest figures from Rightmove show asking rent prices have risen by 14% year-on-year - the biggest regional increase in Britain. But despite the record numbers, there are signs the capital's rent price surge is slowing.
Here, Which? analyses how rent asking and agreed prices differ across London, why costs have surged and offers advice on what to do if you're struggling to pay.
London rent prices surpass £2,500 a month
A new tenant in London will now face being asked to pay an average of £2,501 per month for a rental property, according to Rightmove's latest quarterly rent review.
While the eye-watering sum is sorry news for prospective tenants, the latest quarterly increase is the smallest increase recorded by the property portal in two years. The last three months of 2022 saw a 5.8% uptick in advertised rent prices, so there has been a marked slowdown for the start of 2023.
Compared with the rest of Britain, the annual amount landlords are making in London if they achieve their asking prices is more than double:
| Average annual rent for new tenancies in London | Average annual rent for new tenancies outside London |
|---|---|
| £30,012 | £14,280 |
Source: Rightmove
The gap is huge, however, it has shrunk in recent years. This time four years ago, London tenants were facing rent asking prices that were 163% higher, while now it is 110% more.
- Find out more: our story on the cost of renting details how tenants are faring in other regions
The cheapest and most expensive places to rent in London
Rightmove's data looks at asking rent prices. But what do people end up paying for their rentals?
HomeLet Rental Index offers insight on the actual rents achieved and can break down the data to show the least and most expensive areas in the capital.
The table shows the average monthly rent Londoners are paying by borough as well as how prices have changed compared to last year.
| Borough | Average monthly rent | Annual change (%) |
|---|---|---|
| Croydon | £1,386 | +12.7% |
| Redbridge & Waltham Forest | £1,511 | +12% |
| Barking, Dagenham & Havering | £1,526 | +13% |
| Harrow & Hillingdon | £1,625 | +12.4% |
| Bexley & Greenwich | £1,668 | +12% |
| Ealing | £1,712 | +10.9% |
| Enfield | £1,712 | +9.3% |
Source: HomeLet Rental Index. March 2023.
Please note HomeLet has pooled some data for some boroughs.
Croydon, in the south of the capital, has the cheapest average rent - however it is still £202 above what HomeLet has found is the UK average of £1,184.
Bromley and Tower Hamlets have suffered the biggest annual increases (16.8%), while Camden has seen the smallest increase over the past year (6.5%).
What's driving London rent prices up?
A quarter of homes for sale in London have been put on the market by wantaway landlords - further fueling the lack of supply of rented properties.
According to Zoopla, buy-to-let investors in the capital are selling up at the fastest rate in the country, while Rightmove statistics show London is the worst performing region in terms of rental yields.
That may sound surprising considering the average price of rent, however, London landlords are - in many cases - failing to make a profit.
High buy-to-let mortgage rates, tax changes and energy efficiency requirements are among the struggles landlords are facing.
Are existing tenants facing rent rises?
As landlords struggle to make ends meet, they need to recoup the money from somewhere. Costs are therefore being passed onto existing tenants in the form of rent rises.
While Zoopla, Rightmove and HomeLet figures are based on the prices for new lets, data from the Office for National Statistics (ONS) combines new lets, those renewing their contract, and those within their existing contract. This helps paint an overall picture of the rental market.
The graph below shows the year-on-year rent price changes in London since 2018, according to the ONS.
London mayor Sadiq Khan shared the ONS figures on Twitter last month, stating his desire for a city-wide rent freeze. He wrote: 'Our private rental market can’t continue like this—it’s not sustainable for Londoners who are struggling with other rising costs too.'
A six-month rent freeze was introduced in Scotland last year, but there are no plans to introduce one in London.
- Find out more: rents hiked on the majority of homes in the last year
How much can your landlord increase rent by?
The government stipulates that landlords must be fair and realistic about rental increases, and any rent rise must be in line with the prices of other local properties.
Crucially, the increase can only come once a year for periodic (rolling) tenancies – or at the end of a contract for those on a fixed-term.
There may be a rent review clause in the contract allowing the landlord to raise the price midway through, so make sure to dig out your tenancy agreement and read the small print.
What to do if you're struggling to pay your rent
If you don't think you'll be able to pay your rent or have already missed a payment, it's important to contact your landlord as soon as possible.
They may be willing to discuss a compromise that will enable you to keep living in the property. This could involve reducing your monthly payments for a set period of time.
If you're concerned about rent payments or the prospect of eviction, it can be helpful to get independent expert advice on your options. Specialist housing charities such as Shelter offer free support.
- Find out more: what to do if you can't pay your rent
