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London rents soar again - biggest increase in 3 years

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London rents soar again - biggest increase in 3 years

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Published by Max Salsbury for 24dash.com in Housing

Opinion: Does social housing need a tougher approach to rent collection? Opinion: Does social housing need a tougher approach to rent collection?

Image: Rent arrears via Shutterstock

Rents in London have risen yet again, with the average monthly rental cost increasing by the largest amount in three years.

April's HomeLet Rental Index reveals that the average cost of renting a home in Greater London hit a new high, increasing by 9.4% on April 2013 to a wallet-busting £1,348 per month.

Greater London tenants are currently paying rents almost double that of the rest of the UK.

Shockingly, Homelet's April data also shows that Greater London tenants are spending 57% of their income on rent (after taking tax and national insurance into account) – 9% more than three years ago.

Average rents in the capital have increased by 23.4% in the last three years, whilst average incomes have risen by just 4.2%.

As for the rest of the UK, the average cost of renting a home increased by 2.9% during April to £848 per month.

Martin Totty, Barbon Insurance Group’s chief executive, said: “A recently released report published by Halifax (The Generation Rent Report 2014) shows almost half of this year’s respondents believe Britain will become a generation of renters within the next generation.

“Although perhaps unsurprisingly tenants in Greater London are paying much higher rents than anywhere else in the UK – they are also 57% higher than the region with the next highest average rents - the South East.

“Demand for renting in the capital appears to remain strong across a diverse group of people – from young professionals to students. Whether average rents can continue to increase at this rate is unclear given the more modest rise in average incomes.

“It may be the generally accepted relationship between rental values and income, which determines affordability, is less directly correlated in Greater London. The proportion of people who rent who are drawn from overseas who come to work or study for a period of time, may in part be responsible for the Greater London market behaving very differently to the rest of the UK.”

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