Rents for one bedroom flats average over £1,000 a month in 73% of London Boroughs, according to the monthly Landbay Rental Index.
Only nine London Boroughs have average rents for one bed flats below £1,000 per month. This is down from 11 at the start of the year, after Waltham Forest and Harrow climbed into the £1,000 a month boroughs in April and May this year. Lewisham and Kingston-Upon-Thames joined the group in 2014. The next London Borough set to join this group is Enfield, currently on £990.
A Londoner paying rent of a £1,000 a month has to earn £31,200 before tax to avoid spending over half of their net income on rent. To keep the cost of renting below a third of their net income, they would need to earn £49,500 before tax.
Kensington and Chelsea top the board for most expensive rents for one bedroom properties, averaging £2,275. To the south east of the city, Bexley offers the cheapest average one bedroom rent prices at £791, yet with annual rent increases of 9.8% in the borough among all properties, this price could soon reach over £1,000.
Across all bedroom numbers in London rents have risen 4.1% in the last year to an average of £2,057 in September.
Landbay said that while the costs of renting are increasing, this coincides with a fall in other costs, such as groceries (September CPI), and UK-wide wages rising at 3% (UK Labour Market statistics), with wages in London likely to be rising faster.
John Goodall, CEO of Landbay, said: “These figures will fuel the debate about whether London is becoming too expensive. The city is a victim of its own success – the magnetic draw of its jobs market and its vibrant culture mean that there is a constant supply of people willing to pay to live here.
“One bedroom flats are a good barometer of the young professional job market. People who arrive in the city who don’t want to flat-share with strangers often start in a one bedroom flat and slightly older professionals often move to them after tiring of sharing. The shrinking parts of London that offer average rents below £1,000 shows how successful the city is in attracting young people to live and work here.
“Higher housing costs can be a nightmare for tenants when other costs are rising and their wages are stagnating. Fortunately these rent increases come at a time of growing wages and falling costs, according to the latest inflation figures, so while they may not be welcome they don’t leave the same dent in consumers’ pockets.
“For potential investors, these rental figures show how resilient residential property is as an asset class – even when you have unusual economic forces combining like the current mix of low inflation, low interest rate and high wages.”