A new study by London lettings and estate agent Benham and Reeves has found that the actual cost of renting in London is 37%, or £613, higher per month than the official statistics suggest.
Benham and Reeves conducted an analysis of the current cost of renting across each borough of London based on the asking rent for properties currently available on the market. They compared this data to the official figures from the Office for National Statistics (ONS) to calculate the rental reality gap.
The latest ONS data reports that the average monthly rent in London is £1,672, an increase of 4.7% in the last year. However, the study found that the actual average cost of renting in London is £2,285 per month, which is 36.6% higher than the ONS figure.
The study identified that the largest rental reality gap in London is in the City of London, where the average asking rent is £3,606 per month, which is £1,702 higher than the ONS figure. Kensington & Chelsea and Westminster also have significant gaps of £1,333 and £1,264 per month, respectively.
Other boroughs with high reality gaps include Wandsworth (£904), Camden (£903) and Hammersmith & Fulham (£901). The smallest rental reality gaps are found in Redbridge (£240), Bexley (£248) and Harrow (£298).
Marc von Grundherr, director of Benham and Reeves, commented: “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.”
Surveys and statistics again. The data in this survey is “based on the asking rent for properties currently available on the market”. The ONS data is based on what renters are actually paying. We know that tenants staying put are not subject to open market rents so many are doing just that and paying below market rent. This is where the difference lies. The latest ONS data I can find on rent levels is from Sept 2022 so a bit out of date. The ONS do urge a bit of caution about using their figures. The ONS prefer to work on the basis of indexes which shows which direction rents are heading in percentage terms but does not actually quantify them. This data is valid up to March this year. It shows that London rents are up 4.8% on 2022 levels but the biggest growth areas in terms of percentage rises were Scotland (5.1%) but by far the biggest rise has been in Northern Ireland (9.9%). I know there were some proposals for the PRS in NI but what is happening to generate this rise? Perhaps a NI landlord can give us some background on this.
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