Renting in London:room prices may be falling, but a quarter of house sharers in London still spend more than half their wages on rent
The capital’s growing number of renters may find small relief to hear that rents across London fell by a modest one per cent – from an average of £755 a month to £748 – at the end of last year, according Spareroom’s latest rental report.
Rents in the capital widely stagnated during 2016 as a rise in the number of available homes provided renters with more choice and opportunities to negotiate.
“Falling rents in London might sound like good news for renters, but they’ve got a long way to go before they’re genuinely affordable. One in four house sharers now spends over half their salary on rent,” says SpareRoom.co.uk director Matt Hutchinson.
There is nowhere that highlights this more than in the London areas where properties are in short supply. St Paul’s in EC1 is the most expensive part of London, with rents averaging £1,346 a month. This is almost three times more expensive than the capital’s cheapest postcodes, typically found in ‘up-and-coming’ areas on the fringes of the capital.
LONDON’S CHEAPEST POSTCODES TO RENT A ROOM
North London dominates the list of top 10 cheapest homes to rent, with rooms in Zone 4’s Upper Edmonton the least expensive of all, averaging £530 a month.
Meanwhile, rooms in leafier and slightly further out areas of Winchmore Hill and Totteridge & Whetstone cost tenants £559 and £565, respectively.
Prices fell by up to five per cent in all but two of the list – Lower Edmonton in north London and Abbey Wood in south-east London, a soon-to-be Crossrail hotspot, where room prices have risen by four per cent to £541 a month.
However, as Londoners seek cheaper alternatives, demand in more affordable areas surges and prices are likely to increase in line with demand.
“As 2016 came to a close, we saw London rents peak and renters look to commuter towns around the capital instead of concentrating on central locations as we’ve seen in the past,” says Hutchinson.
BUCKING THE TREND: LONDON’S FASTEST-RISING POSTCODES
With rental increases of eight per cent, north London’s Southgate, in Zone 4, and south-east London’s East Dulwich, in Zone 2, are among the fastest rising postcodes.
East Dulwich is benefiting from the recent overground extensions through Forest Hill on one side and Peckham on the other, which has led to south-east London increasing in popularity, and room rates rising accordingly to an average of £662.
“The SE postcodes are still the cheapest in the capital so are proving popular with young professionals looking for a balance of lifestyle and affordability,” says Hutchinson.
Southgate, at the top end of the Piccadilly line, is starting to see a rise in demand because rents in more central locations are stretching tenants’ affordability to breaking point. Room rents of £613 are a much more appealing prospect, as is having a much greater chance of getting a seat on the Tube.
Renters, you may want to secure those contracts quickly.