"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"
Research by London lettings and estate agent, Benham and Reeves, analysed the current cost of renting across each borough of London based on the asking rent for those properties that are currently available to rent on the market, comparing this data to the official figures curated by the Office for National Statistics to calculate the reality gap facing tenants navigating today’s market.
The latest ONS data states that the average London rent is currently £1,672 per month having increased by 4.7% in the last year.
However, based on the average asking rent of properties currently available on the market, the actual average cost of renting in London is £2,285 per month, some 36.6%, or £613, higher than stated by the ONS.
London’s 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 & Chelsea, the reality gap is £1,333 per month, while in Westminster it’s £1,264.
The rental reality gap also surpasses £900 in Wandsworth (£904), Camden (£903), and Hammersmith & 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.
Director of Benham and Reeves, Marc von Grundherr, commented:
“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.
"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.
"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.”
