The average cost of renting a room has risen above £750 per month in all but two London postcodes, data has revealed.
Figures shared exclusively with Homes & Property by houseshare portal SpareRoom showed that the price of being a tenant has risen disproportionately in many of the capital's traditionally more affordable neighbourhoods.
While there were six postcode districts with average rents below £750pcm in the first three months of this year — plus another three areas under £752pcm — just two met either criteria in the second quarter.
It was only at the start of this year that SpareRoom data showed that the pool of London neighbourhoods with sub-£700 average rents had shrunk from 43 to four in 2022. Now none remain.
Manor Park's E12 neighbourhood was the cheapest for tenants in the latest period, with a typical monthly bill of £714. The other side of the river, rooms were available in SE28 (Thamesmead) at an average of £741pcm.
Five cheapest London postcodes for house sharing
Average monthly rent for a room in Q2 2023 |
|
E12 (Manor Park) |
£714 |
SE28 (Thamesmead) |
£741 |
E7 (Forest Gate) |
£753 |
SE26 (Sydenham) |
£756 |
E6 (East Ham) and E13 (Plaistow) |
£759 |
Source: SpareRoom
The eight cheapest postcodes in the second quarter of 2023 were all in east or south-east London. Edmonton’s N9 and N18 neighbourhoods, both of which were in the sub-£750 bracket earlier this year, have seen typical costs rise to £776 and £788 respectively.
All this means that tenants in 108 of the capital's 110 postcode districts can now expect to shell out at least £753 per month, which equates to £9,036 per year. This is about a third of take-home pay for someone on £34,000 per annum, according to an online tax calculator.
Of course, in many neighbourhoods, rents are far above this level.
South Kensington’s SW7 postcode overtook SW3 (Chelsea) as the most expensive place to houseshare, with tenants paying a typical £1,460pcm for a room in the second quarter of this year. An annual salary in the region of £75,000 is required to get rent at this level down to a third of post-tax pay.
Five most expensive London postcodes for house sharing
Average monthly rent for a room in Q2 2023 |
|
SW7 (South Kensington) |
£1,460 |
SW3 (Chelsea) |
£1,433 |
W1 (Soho-Mayfair) |
£1,367 |
WC2 (Holborn-West End) |
£1,312 |
SW1 (Belgravia-Pimlico) |
£1,245 |
Source: SpareRoom
Rents rose by more than a quarter in 10 London locations in the last year. E16, which covers Canning Town as well as land around the ExCeL events centre and City Airport, saw the greatest hike, a whopping 31 per cent rise from £787 per month in Q2 2022 to £1,031 in the latest period.
Meanwhile the number of postcodes in the capital where average rents are in excess of £1,000 continued to rise. Having soared from 7 to 33 in a year, the tally of neighbourhoods where tenants can expect four-figure monthly bills grew again to 38 in the second quarter of 2023. The new entrants to the £1,000-plus club last quarter were E2 (Bethnal Green), E8 (Dalston) and E16 (Canning Town) as well as W10 (North Kensington) and SW18 (Wandsworth).
The median London rent — found by listing all 110 postcodes in cost order and selecting the middle point — rose just marginally in the last three months, from £895 per month to £899.
But the difference between the 10th most expensive postcode and the 10th cheapest dropped by 8 per cent to £418 highlighting the continual erosion of affordability in the capital.
SpareRoom director Matt Hutchinson said: “It’s not so long since £750 was the average rent in London; now you’d be hard pressed to find somewhere for that in most London postcodes.
“The truth is, there aren’t really any affordable areas of London left, so anywhere below the London average is proving incredibly popular as people try and make the most of their money.”
Swathes of the capital now ‘off limits’
Tenant bodies hit out at the reality behind the latest figures.
Dan Wilson Craw, deputy chief executive of Generation Rent, said: “Tenants have reached the limit of what they can afford to pay. The only options facing many of us on ordinary incomes are to share with others in overcrowded homes or move further away from work or family. It’s even harder if you rely on benefits.
“Rents on new tenancies wouldn’t be rising so fast if there were enough homes being built to accommodate everyone who wants to live in London. As well as raising Local Housing Allowance to keep pace with rents, we need much more effort from national and local politicians to build more homes, especially social housing.”
A spokesperson for the London Renters Union added: “Large swathes of the capital are now off limits to people on low incomes. Many of the workers who keep our city going are forced to choose between cutting back on essentials or leaving their homes and communities.
“It’s not fair that many renters are unable to plan for the future because they live in fear of the landlord raising the rent to unaffordable levels. The government must act to set caps on rent increases before the whole of London becomes completely unlivable for ordinary people.”
Separate data from property insurance provider HomeLet this week revealed that average Greater London rents were at an all-time high of £2,077 per month in June, having risen almost 2 per cent from May and more than 12 per cent in a year.
