What is happening in the rental market?
While we bounce back from the pandemic, the decline is encouraging, the real positivity lies within the fact that the average London rent is now 5.7% higher than it was in 2019, prior to the market slowdown.
Average rents in London increased for the second consecutive quarter, rising by +£42 (+3.14%) from £1,339 to £1,381, the largest increase across all regions. Inner areas show the biggest growth (+£54, +3.85%). Outer London growth is below the UK average (+£21 or +1.67%).
Year-on-year, rents rose +£64 (+4.86%) from £1,317.
When looking at property types in London, flats have seen the largest growth in average rents, up +£48 (+3.59%), from £1,337 to £1,385. This was also the biggest increase across all regions. Terraced properties in London have seen the smallest increase, rising +£12 (+0.72%) to £1,670, this rise counteracts the slight reduction in rents seen in Q3 2021 (-£6, -0.36%).
The top five most expensive boroughs to live in the UK are all in London: City of London, Kensington & Chelsea, Islington, Westminster, and Wandsworth. These are also the least affordable boroughs. Moreover, Islington, Kensington & Chelsea and The City of London have seen the sharpest rise in rents nationally, with increases of +£273 (+19.60%), +£191 (+12.78%) and +£167 (+10.42%) respectively.
The average salary in London is £39,716 (from £40,994 in 2020), meaning that Londoners typically spend 42.05% of their monthly income on rent.
The latest DPS Rent Index shows average UK rents continuing to display significant growth. Average rents in the UK for Q4 2021 are now £834, a £16 (+1.96%) increase on Q3 2021, and £42 (+5.30%) above their position this time last year.
Excluding London, UK average rents are now £737, an £11 (+1.52%) increase from Q3 2021, and up £38 (+5.44%) from £699 in Q4 2020.
Average rents have increased for all property types since the last quarter and annually. Demand for detached properties continues to lead the way as it has done since the start of the pandemic, growing to £1,143, increases of £26 (+2.33%) since Q3 2021 and £88 (+8.34%) from this point last year. However, demand for other property types has also been strong since Q4 2020, with rents for semi-detached properties growing +6.85% to £905, terraced properties up +6.72% to £810, and rents for flats rising +5.48% to £847