Cost of living in London: rent in the capital is most expensive in Europe and fourth most expensive in the world

Frustrated tenants seeking a place to call home in the capital can feel vindicated, as a new report reveals that rent in London is the most expensive in Europe and the fourth most expensive in the world.

The report by global mobility experts Employment Conditions Abroad International (ECA), compared the cost of living for expats and people re-locating for work in 279 cities around the world.

It looked at the average cost per month of a three-bedroom home in areas popular with expats. London's monthly rent of £5,187 topped the table of rental prices in Europe.

However, the study found that while central London rents (£7,000) were more expensive than outer London (£4,000), rental costs in Zone 1 had also decreased over the past year.

“Rents fell in prime neighbourhoods in London travel Zone 1, with salaries for top jobs largely stagnant and demand waning," said Alec Smith, accommodation services manager at ECA International.

"Rents in outer London were more stable but are anticipated to increase with London property purchases growing ever more out of the reach of many Londoners."

London's housing affordability crisis has pushed many businesses out of the capital to attract workers to cities with a better quality of life.

With the BBC and other media companies now based there, Manchester has the most expensive rental accommodation in the UK outside of London.

The average rent of a three-bedroom house in the north-western city is now estimated at £1,844 per month – £54 more expensive than 2018, pushing Manchester to 30th most expensive in Europe and 119th in the world.

“Central Manchester has seen a large population growth in recent years and is now widely considered the second most important city in the UK, economically,” said Smith.

“Numerous companies have relocated to the city, fuelling demand for rented accommodation, particularly in central areas.”

Birmingham has seen the biggest spike in rental costs across the UK, increasing by £110 per month since last year, making it the 36th most expensive city in Europe to rent in.

At the other end of the spectrum, Aberdeen is the only UK city to see a drop in rental costs, falling by £190 per month.

This is largely ascribed to the decline in the oil and gas industry, which has seen a reduction in the number of overseas renters in the Granite City.

Meanwhile, rents in European cities rose significantly during the same period, in part due to the strength of the Euro, the report said.

Dublin rent rose the most over the year, up £236 to £2,902 a month, thanks to the city's economic recovery following the financial crash, combined with a number of international companies locating their European headquarters there. It is now the fifth most expensive city to rent in Europe.

Madrid, Rome, Paris and Barcelona all saw average monthly rent rises of over £100 per month.

The report said Paris, the sixth most expensive European city with average monthly rent of £2,830, is experiencing a Brexit boost with its £107-a-month rent rise attributed to businesses relocating to the French capital.

London may top the table in Europe, but it is only the fourth most expensive city for renting in the world.

In first place, Hong Kong takes the title of the world’s most expensive location in the world, with typical expat accommodation averaging £8,315 per month.

New York, Tokyo, London and Port Moresby in Papua New Guinea were the remaining five priciest cities for expat rents.