While London tenants have been welcoming the news that rents are finally falling across the capital, huge demand for homes in the most affordable areas is sending rents rising across south-east London.
Rents in north, west and east London have dropped by an average of one per cent since 2016, however the latest rental index from SpareRoom.co.uk found that in pockets such as Blackheath and Dulwich, rents have gone up by two per cent, an average of £57 a month.
“South-East London is the focus of London’s growth now. It’s historically been the capital’s cheapest area, largely due to its reliance on trains rather than tubes. That’s all changed in recent years, with the Overground extensions through Forest Hill and Peckham bringing more people South East in search of cheaper rents,” said Matt Hutchinson, director of SpareRoom.
The rise was led by Blackheath, where average monthly rents rose by £96 to hit £704 per month. Dulwich, Forest Hill and Herne Hill were also among the 10 postcodes with the biggest rent increases.
With the average rent for a room in the area calculated at £506 per month, Abbey Wood, which spans the boroughs of Greenwich and Bexley, is the cheapest place to rent a room in the capital. Nearby Thamesmead is second cheapest with average monthly rents of £528.
Top 10 London areas where rents have risen the fastest:
|Area||Annual increase||Average monthly room rent|
|St Paul's, EC4||12%||£1,297|
|Holland Park, W8||12%||£1,079|
|Forest Hill, SE23||11%||£646|
|Canning Town, E16||8%||£772|
|Herne Hill, SE24||7%||£711|
Average rents dropped three per cent in ‘EC’ postcodes, the most expensive part of London where a room in Clerkenwell, Old Street and parts of Shoreditch now costs an average £916 each month.
North London experienced a similar price drop, with a room in renters' favourites Islington and Stoke Newington now costing £747 a month.
While this may appear to be a positive development for financially stretched tenants, the wider figures mask a “worrying affordability trend,” according to the report.
“Rents might be coming down in more expensive areas but, as long as they continue to rise in cheaper areas, those on middle and low incomes will carry on feeling the squeeze,” said Hutchinson.
“We’ve reached the point where London’s last affordable pockets are fast disappearing.”