According to the HomeLet Rental Index, London’s average monthly rent for August 2023 is £2145.
The average rents calculated by online portals and property search engines are often much higher.
Here is a breakdown of rental property types in London as collated by home.co.uk:
|Property type||Average rent
Source: home.co.uk, London Market Rent Summary, October 2023
But demand for rental properties in the city continues to outstrip supply despite the ever-climbing rental costs. The number of affordable rooms, in particular, has been falling, according to Zoopla. For example, the quantity of available one-bedroom homes going for less than £1500 per month in London has fallen from 2066 in July 2022 to 1146 in July 2023.
The Financial Times writes that this continuing boom in rental demand is being fuelled in part by immigration and a lack of investment in student accommodation, which is pushing students into the private rental sector. This imbalance has been exerting upward pressure on rents and driving them ever higher.
Rents in London are more than 50% higher than in other major UK cities, and the rental income that can be gained every month from a buy-to-let property in London is substantial.
However, the city has the lowest gross rental yield in the UK, as per Zoopla. This is due to the much higher-than-average property prices.
|Average gross yield||Average monthly rent||Average price of a buy-to-let property
Source: Zoopla Rental Market Report September 2023 (July 2023 data)