London bucks the nationwide trend: Rents dip in the capital but hit three-year high across the UK

There’s some positive news for London’s tenants this week as a new report reveals rents across the capital have fallen by an average of two per cent over the course of the year.

The average cost for a room in a shared house is now £725 a month, down from £741 this time last year, according to the latest data from SpareRoom.

This £16 saving will come as a small relief to Generation Rent who are now spending 40 per cent of their wages renting in London, according to a recent report released by the Institute for Fiscal Studies.

In comparison, the average rent-to-income ratio among private renters was 28 per cent outside of the capital.

“London rents maintaining their three-year low probably looks like great news for the capital’s renters, but for most it’s a case of too little, too late,” says SpareRoom director Matt Hutchinson.

“Many renters are hitting their affordability ceiling so what we’re seeing is a shift within London towards traditionally cheaper areas in the South East of the city. At the same time, the number of people fleeing London in search of cheaper housing is at a five year high.”

RENTING ACROSS THE UK

London remains, by far, the most expensive city to rent in the UK, so it comes as little surprise that the number of Londoners looking to relocate outside of the city is up by 54 per cent.

Glasgow, where rents are more than a third cheaper, has seen the biggest increase in interest from Londoners - up a mammoth 1,063 per cent. This is followed by Manchester which has seen a 223 per cent increase.

Both cities are seeing more investment from the tech and business sectors which is attracting young professionals. This rise in popularity is also believed to be a contributing factor to higher rents - up by four per cent on average.

After London the next highest rents in the UK are found in Oxford where room rates average £587 per month, followed by Cambridge, where it costs £564 per month.

RENTING IN LONDON

In line with house buying trends, average rents fell the hardest in some of the most expensive parts of London.

Rooms in Chelsea in west London are down more than £100, from £1,056 to £952, and rents in south-west London’s Clapham, ever-popular with university leavers, have fallen from £846 to £778.

North Londoners are saving around £35 a month with rents now averaging £703.

Meanwhile east Londoners are around three per cent up, with rents dropping to £697 on average.