New tenants in London have always needed bigger budgets than their fellow renters in other parts of Britain – but 2023 tested the depth of their pockets like never before. According to the Office for National Statistics (ONS) Index of Private Housing Rental Prices, London rental prices surged by an unprecedented 6.9% on average in 2023 – the highest annual price rise in the capital’s history since the ONS began tracking London rents in 2006. This increase reflects both rents from existing and newly advertised tenancies in London, with new movers feeling the brunt of these hikes. This led to a staggering total expenditure of £32.1 billion on rent in London for 2023, eclipsing the combined rental costs of Scotland, Wales, the Midlands, and the Northeast.
Average Rental Prices in 2023 by Property Size in London
One-bedroom properties in London The London rental market for one-bedroom properties showed a remarkable and consistent increase throughout 2023:
- January started with rental prices at £1,700 per month, escalating to £1,825 by March.
- A period of stabilization was seen from March to July, with prices hovering around £1,800.
- October saw an annual peak, with prices crossing £1,900.
- The most affordable average rental price was £1,150 in Pinner, whereas Knightsbridge topped the charts at £3,683.
- Greenwich represented the median at £1,800.
The steady rise in one-bedroom property rents in London is indicative of a strong demand from single professionals and young couples. The significant difference between the lowest and highest prices across London neighborhoods highlights the diversity in living standards and the choices available in the city.
Two-bedroom properties in London Two-bedroom London rental properties exhibited a more varied trend over 2023:
- The year began with average rents at about £2,200, peaking at £2,650 in May.
- A dip to £2,300 was observed by July, followed by a gradual increase back to £2,600 by November.
- Eltham offered the most budget-friendly option at £1,600, with Knightsbridge at an opulent £6,392.
- Bermondsey’s average rent of £2,350 represents the median.
This fluctuation in two-bedroom property prices in London could be attributed to varying family needs and the seasonal effects on the rental market. The wide range in prices across different areas again emphasizes London’s varied accommodation offerings.
Three-bedroom properties in London The market for three-bedroom properties in London saw both steep rises and dips throughout 2023:
- Starting at about £3,200 in January, rental prices shot up to over £3,700 in March.
- A decrease to £3,400 was seen by June, settling at £3,300 in November.
- Chislehurst offered the most affordable option at £1,875, while Knightsbridge demanded a hefty £10,833.
- Ealing Broadway‘s median price was £3,000.
The three-bedroom segment in London experienced the most volatility, suggesting a more complex interplay of supply and demand, possibly influenced by families needing more space and the limited availability of larger properties in desirable areas.
Looking Ahead to 2024 in London’s rental market Zoopla predicts a continued rise in London rental prices in 2024, albeit at a slower rate of 2%. Richard O’Donnell of Zoopla remarks, “The UK is past peak rental growth, which will be welcome news to renters.” The average London rental price was £2,425 in November 2023, a significant 11.8% increase from the previous year. Zoopla’s forecast implies an average price of approximately £2,474 in 2024.
Despite the rapid increase in London rental prices in 2023, properties are still being snapped up quickly, with an average market time of less than 13 days. This underlines the competitive nature of London’s rental market and the importance of being well-prepared and proactive in your search to secure your ideal home in London. The slower rate of increase projected for 2024 offers a small respite, but the message is clear: in London’s fast-paced rental market, readiness and swift action are key.