Private Sector Rents Bulletin
Issue 2
Autumn 2003
Annual bulletin number 2
This is the second GLA private sector rents bulletin. In
future we aim to produce the bulletin annually at around the
same time of year. The bulletin sets out to provide a
snapshot of private sector rents in London on the basis of
data collected in classified advertisements for lettings. In
this bulletin, data from newspapers issued in November 2003
have been analysed on behalf of the GLA by Plus Four Market
Research Limited.
The primary sources of data were ‘Loot’ and the ‘Evening
Standard’, though local newspapers were also used in an
attempt to achieve London-wide coverage. The data limitations
are set out on page 4.
Sample size
A total of about 8,000 classified adverts were coded and
entered on the database for this year’s bulletin.
Private sector rents remain high, but may be falling
Once again the findings reflect the wide range of rents in
the sector and the variations in rents within and between
boroughs. While rents remain very high in London compared to
the rest of Great Britain, the evidence suggests that there
has been a slight decline in overall rent levels over the
past year, at least for self-contained accommodation.
Table 1 gives an analysis of weekly rents for rooms, bedsits,
sharers and studios. Tables 2 to 4 give average weekly rents
for different sizes of houses, maisonettes and flats.
The highest average (mean) rents for houses, maisonettes and
flats are found in the central London boroughs of Camden,
Hammersmith & Fulham, Kensington & Chelsea and Westminster.
Relatively high rents for larger properties (three or more
bedrooms) are found in Islington and Tower Hamlets, the
latter perhaps influenced by high prices in dockland areas.
The lowest average rents are found in Bexley, Havering,
Bromley, Sutton and Barking & Dagenham.
The overall average rent for two-bedroom accommodation in all
boroughs was £225. The corresponding average rent for all
central boroughs (see the glossary on page 4) was £301 and
for other boroughs £206.
Although the data given in tables 1 to 4 has to be treated
with caution (see page 4) there is some evidence of a small
fall in average rent levels compared to last year. The
average rent for two-bedroom accommodation was £10 per week
lower in November 2003 compared to a similar period the
previous year. In real terms (taking into account inflation)
this will be a slight underestimate of the difference. The
apparent decline in average rents is higher for other sizes
of accommodation.
The decline in average rent levels is not common across all
London boroughs, however, though the sample sizes may not
support comparisons over time at a borough level. The fall
in average rent levels was higher in central London than in
other London boroughs.
The highest average rents for rooms, bedsits and sharers are
similarly found in Camden, Kensington & Chelsea and
Westminster, though average rents were over £100 per week in
nine other boroughs.
Overview of private sector rents in London
The government’s regional figures on rent levels in ‘free
market’ private tenancies (i.e. not including regulated
tenancies) are given in Table 5. These show that, in the
years 2001/02 and 2002/03 combined, the average rent in
London was £189 per week. This is nearly double any other
region of England, with the exception of the rest of the
South East (£135).
Data from the Royal Institution of Chartered Surveyors (RICS)
shows an even starker difference between London and the rest
of the country (Table 6). The data shows the average rent
per calendar month for all categories of property in London
was £1,510 in the third quarter of 2003, compared to £511 per
month for the rest of Great Britain excluding London. Rent
levels in London were more than double those of the region
with the next highest average rent, which was the rest of the
South East at £692 per month. Data from RICS lettings
agencies will tend to reflect higher rents than ODPM surveys
or classified advertisements in Loot, because of the nature
of their market.
Despite much higher rents in London, evidence from RICS
quarterly surveys show that rent levels have declined in the
capital in the current year and that they are rising in other
regions of the country, particularly the North (1).
The findings in this bulletin give a similar picture
regarding private rents in London. In the first GLA private
sector rents bulletin (Winter 2002/03), we reported that
although rents were very high in London compared to other
regions, there was evidence that rents had been falling over
the past year. This was on the basis of the quarterly RICS
residential lettings surveys, which are based on returns from
surveyors. The fall in rents was attributed by RICS to an
oversupply of property to rent following the ‘buy to let’
boom in London. The outlook at the time of the last bulletin
was, however, that tenant demand was becoming stronger and
that a realignment in supply and demand conditions would take
place. It was suggested that an increasing number of
prospective first-time buyers were renting because they could
not afford to buy and that investor activity would stabilise.
This has not been the case to date. RICS surveys in 2003
indicate that although private rents in London remain by far
the most expensive in Great Britain, they have continued to
decline throughout this year. Comparing figures for
the third quarter of 2003 with the third quarter of 2002,
there was an overall reduction of £144 per month across all
sizes and types of property (equivalent to £33 per week).
RICS surveyors reported that demand for rental property in
London barely rose at all in 2003. This has been coupled with
high rises in new instructions from property owners to RICS
surveyors in the first half of 2003 and a much smaller
increase in the third quarter. The slowdown in the third
quarter may indicate that a realignment of the London rental
market is beginning to take place.
We know that demand for affordable housing has reached record
levels in London, with over 62,000 homeless households in
temporary accommodation and a crisis in recruitment and
retention in key organisations and industries. Yet RICS
surveyors report that demand for the rented properties they
are marketing has hardly risen and rent levels have declined.
This suggests that much of the rental market in London is
unaffordable for many groups needing housing. The result may
be further reductions in rent levels. This is a good reason
to expand initiatives such as private sector leasing, where
councils or housing associations use private sector
properties for an agreed period to house people in housing
need and, in return, property owners avoid having to manage
tenancies themselves, receive guaranteed rental income and
receive the property back in good condition at the end of the
period.
A further problem is that many landlords will not rent to
people in receipt of Housing Benefit. Many of the adverts we
see in newspapers state ‘no DSS’ or similar. This reflects a
variety of familiar problems with the current housing benefit
system and administration, for example uncertainty over how
much benefit will be received in any particular case and long
delays experienced in receiving benefits.
Housing Benefit reform
The Local Housing Allowance (LHA) is being launched by the
government as an alternative to the current housing benefit
system in ten ‘pathfinder’ authorities. London’s pathfinder,
Lewisham, began in in December 2003. Private rented sector
tenants in the pathfinders will be the first to receive the
new allowance, which is intended to give them choice over
where they live and how much rent they pay. (2)
Claimants will receive a standard allowance based on the area
in which they live and the number of occupiers in the
property. The amount will be based on a standard local rate
set by the Rent Officer and will reflect rents in the middle
of the market. These allowances will be published and Rent
Officers will no longer need to decide for each individual
property what level of rent is eligible for housing benefit.
Tenants who rent a property at below the standard allowance,
who move to a less expensive property in the local area, or
who negotiate to keep the rent below the standard allowance,
will be able to keep the difference.
The intention is also that payment of the allowance will
normally be to the tenant rather than the landlord. This move
away from paying benefit direct to a landlord is intended to
encourage personal responsibility.
Some concerns have been expressed about the possible impact
of the proposals. It has been argued that the ending of
benefit direct will inevitably lead to increased rent
arrears. It has also been predicted that rents in a locality
that are currently lower than average will tend to increase
to published standard allowance levels. The Department for
Work and Pensions will be evaluating the pathfinders,
including whether the new system has any impact on rent
levels and on the quality or on supply of accommodation in
the private rented sector.
(2) Further information about the proposed reforms is available in ‘Building choice and
responsibility; a radical agenda for Housing Benefit’ (available at www.dwp.gov.uk).
Private landlords survey
The Office of the Deputy Prime Minister (ODPM) has recently
produced a report with findings from a private landlords’
survey in 2001.(3) Some of the findings from the survey
include (note that these are national, not specifically
London):
The number of company and large-scale landlords appears to
have been declining and the sector is increasingly
dominated by small-scale private individual landlords
renting property as a sideline. Nearly two thirds of
privately rented dwellings are owned by private
individuals, most of whom have other paid employment.
The average net rental return on market value (i.e. net of
running costs and excluding increases in capital value) was
5.5 per cent, although rising house prices in many areas
would have provided landlords with higher total returns.
Gross rental returns (before running costs and excluding
increases in capital values) for a quarter of dwellings
were less than five per cent, with costs exceeding income
for some seven per cent of dwellings.
Preferred tenants are those in work, particularly ‘young
professionals’. Lettings to tenants on Housing Benefit
account for only 18 per cent of lettings overall and some
30 per cent of landlords have never let to tenants on
Housing Benefit.
Nearly three-quarters of those with experience of letting to
tenants on Housing Benefit would prefer not to let to
people on benefits, with landlords frequently dissatisfied
with the speed of processing claims (60 per cent).
(3) Private Landlords Survey: English House Condition Survey 2001
Data limitations
The market rent statistics in tables 1, 2, 3 and 4 of this
bulletin have been calculated from a computer database of
about 8,000 advertised lettings. There are some important
qualifications to be borne in mind when considering these
data:
The small sample size in some boroughs means that it is less
possible to be confident about mean rents, i.e. those
boroughs for which there were relatively few lettings
advertised.
In the real market, advertised prices may not be achieved.
The advertisements on which the figures are based may not
provide a fully representative sample of market rents in
the sector; in particular, the calculation of mean rents at
both London-wide and
borough levels must be influenced by the locational mix of
the sample.
It is difficult to assess the extent to which tenancies
arising from newspaper advertisements are representative of
all private sector unregulated tenancies (some tenancies
are let by word of mouth, others through adverts in local
shops etc.)
No account is taken of whether a property is furnished or
unfurnished or whether the rent is inclusive or exclusive
of bills. These may have an effect on the rent offered, but
the information is often not stated in classified
advertisements. The data presented in tables 1 to 4 should
therefore be treated as indicative of broad trends rather
than as a detailed picture of reality.
Glossary
Central London - for the purpose of this bulletin, includes
the boroughs of Camden, Hammersmith & Fulham, Islington,
Kensington & Chelsea and Westminster and the City of London.
Acknowledgements
Thanks to Plus Four Market Research Limited for their work on
collating and analysing the data. (www.plus4.co.uk)
Contact us
For further information please contact Chris Smith in the
Housing and Homelessness Unit, telephone 020 7983 5770, e-
mail chris.smith@london.gov.uk.
Table 1 Average rent per week by borough for rooms, bedsits, sharers
and studios – November 2003
Rooms, Bedsits, Sharers Studios
Mean Number Minimum Maximum Median Mean Number
£ £ £ £ £
Barking & Dagenham 72.55 11 60 80 75 112.00 2
Barnet 94.64 22 65 120 91 128.26 58
Bexley 72.82 17 55 88 75 96.33 3
Brent 94.75 28 50 160 97 130.07 71
Bromley 79.94 33 46 110 80 116.88 8
Camden 131.37 27 90 210 127 164.21 71
Croydon 88.68 19 46 210 85 121.36 11
Ealing 96.57 23 50 146 92 133.55 29
Enfield 86.79 58 50 333 79 152.84 37
Greenwich 88.05 22 60 133 75 115.89 9
Hackney 96.24 21 70 150 92 134.75 28
Hammersmith & 114.33 27 70 150 115 142.35 49
Fulham
Haringey 91.97 37 60 325 85 125.10 105
Harrow 87.63 16 55 115 90 124.85 13
Havering 71.40 10 50 100 70 114.00 1
Hillingdon 74.00 3 65 92 65 123.00 10
Hounslow 105.50 16 75 150 103 121.06 18
Islington 103.42 24 70 130 108 139.69 52
Kensington & 120.73 11 70 195 115 165.81 73
Chelsea
Kingston upon 80.86 14 53 95 85 133.00 3
Thames
Lambeth 114.19 36 60 397 100 129.03 32
Lewisham 82.72 32 58 150 79 116.72 32
Merton 82.94 16 57 127 79 135.77 13
Newham 85.53 15 58 220 75 111.13 15
Redbridge 76.87 15 50 125 75 121.07 14
Richmond upon 109.72 25 67 300 100 117.86 7
Thames
Southwark 100.67 27 58 360 90 147.53 17
Sutton 117.29 7 80 290 95 * *
Tower Hamlets 101.86 22 60 295 88 150.16 19
Waltham Forest 86.62 13 55 150 75 115.25 8
Wandsworth 101.75 36 55 350 90 139.66 38
Westminster 140.69 26 80 250 126 166.68 65
Corporation of 150.00 1 150 150 150 182.80 5
London
Central London 122.86 116 70 250 120 157.94 315
Other boroughs 92.09 594 46 397 84 129.60 601
All boroughs 97.24 710 46 397 89 140.48 916
Source: Greater London Authority February 2004
Notes: *No data available.
For a list of central London boroughs, see the Glossary on page 4.
Data limitations – see page 4.
Table 2 Average rent per week by borough for houses, maisonettes and
flats, by number of bedrooms – November 2003
Number of bedrooms
One Two Three Four or more
Rent No. Rent No. Rent No. Rent No.
£ £ £ £
Barking & Dagenham 137.71 21 179.37 40 201.29 24 272.00 6
Barnet 157.87 78 200.21 85 275.93 41 332.08 36
Bexley 129.28 25 160.72 54 184.06 32 224.00 7
Brent 166.43 61 217.00 74 257.63 51 360.00 55
Bromley 147.62 52 173.16 55 198.04 24 352.50 2
Camden 215.66 83 302.91 45 356.80 40 495.42 12
Croydon 143.19 37 186.64 45 216.46 24 296.85 13
Ealing 179.22 64 210.71 58 288.86 79 396.05 56
Enfield 139.57 44 196.09 137 234.52 85 346.50 32
Greenwich 146.78 40 216.46 68 238.42 52 282.40 15
Hackney 173.30 63 226.06 71 252.00 31 342.69 26
Hammersmith & 213.64 73 277.90 69 378.08 48 517.39 44
Fulham
Haringey 163.61 107 206.18 105 263.28 58 324.41 69
Harrow 157.27 41 196.59 51 233.30 60 330.57 14
Havering 127.81 16 164.35 17 118.58 12 253.33 6
Hillingdon 151.80 10 228.64 14 226.32 22 345.06 18
Hounslow 175.83 48 237.95 41 275.21 28 405.43 14
Islington 197.04 108 271.11 73 340.46 35 460.73 33
Kensington & Chelsea 244.07 61 331.65 52 474.00 10 568.20 10
Kingston upon 169.13 15 205.36 22 270.00 10 335.00 2
Thames
Lambeth 176.13 103 219.51 118 293.84 73 388.05 111
Lewisham 147.94 84 186.40 90 224.00 50 298.92 26
Merton 171.20 74 217.73 55 276.21 53 414.16 25
Newham 149.13 61 183.80 69 223.90 92 258.69 55
Redbridge 142.34 41 172.38 39 235.70 63 263.46 13
Richmond upon 196.39 28 233.58 31 251.70 10 432.00 5
Thames
Southwark 173.13 97 224.59 98 251.99 70 329.51 61
Sutton 134.86 14 171.71 17 202.00 6 295.25 4
Tower Hamlets 196.96 56 233.53 70 310.18 39 372.75 40
Waltham Forest 143.36 53 179.37 62 230.28 71 264.78 23
Wandsworth 188.97 128 234.12 156 284.60 109 372.13 98
Westminster 245.57 93 332.57 74 398.67 18 525.38 13
Corporation of London 235.00 12 281.43 7 * * 425.00 1
Central London 221.68 430 301.32 320 372.53 151 503.11 113
Other boroughs 164.01 1,461 206.01 1,742 251.04 1,269 344.69 832
All boroughs 179.19 1,891 224.55 2,062 266.09 1,420 366.04 945
Source: Greater London Authority February 2004
Note: * No data available,
For a list of central London boroughs, see the Glossary on page 4.
Data limitations – see page 4.
Table 3 Minimum, maximum and median weekly rents, by number of
bedrooms – November 2003
Number of bedrooms
One Two Three Four or more
Min Max Med Min Max Med Min Max Med Min Max Med
£ £ £ £ £ £ £ £ £ £ £ £
Barking & 115 175 137 98 650 173 144 254 203 167 323 312
Dagenham
Barnet 75 250 158 145 360 196 195 420 280 250 500 305
Bexley 115 150 127 135 200 161 133 250 176 169 370 208
Brent 115 254 170 160 350 209 150 400 254 265 647 350
Bromley 115 196 150 127 231 173 160 254 202 220 485 353
Camden 140 320 200 145 450 300 250 475 350 320 600 500
Croydon 118 196 143 139 750 173 185 300 215 230 400 277
Ealing 130 254 176 121 280 217 185 925 277 197 660 365
Enfield 65 191 150 80 323 192 173 335 230 210 800 312
Greenwich 115 190 139 138 650 180 139 370 231 208 525 254
Hackney 115 570 165 115 595 200 160 330 265 220 500 338
Hammersmit 157 550 200 140 450 275 277 675 380 250 975 500
h & Fulham
Haringey 80 270 160 58 350 200 180 420 250 200 550 323
Harrow 117 200 150 75 427 185 53 462 228 185 693 277
Havering 95 150 131 135 185 162 160 220 188 185 346 241
Hillingdon 139 167 150 155 312 214 173 300 219 210 577 300
Hounslow 127 275 174 118 500 220 202 575 242 219 795 363
Islington 115 350 190 120 510 250 220 585 330 240 750 425
Kensington 150 395 245 210 750 325 380 650 475 275 900 525
& Chelsea
Kingston 92 225 173 156 250 198 225 323 273 335 335 335
upon
Thames
Lambeth 104 310 170 150 600 201 162 475 277 150 700 375
Lewisham 95 196 150 115 271 185 150 370 219 219 480 280
Merton 127 346 164 156 323 200 173 508 277 231 577 438
Newham 115 240 150 80 325 185 162 300 223 200 480 250
Redbridge 100 167 145 124 210 170 175 955 220 190 393 250
Richmond 144 650 173 150 380 219 191 347 248 350 680 380
upon
Thames
Southwark 100 625 162 141 850 216 70 500 248 180 460 320
Sutton 98 161 140 150 196 172 196 208 202 290 311 290
Tower 130 320 185 175 340 230 220 750 299 230 625 378
Hamlets
Waltham 118 170 140 139 240 176 178 370 225 210 400 231
Forest
Wandsworth 125 280 185 80 350 230 196 450 271 145 800 340
Westminster 155 500 230 230 650 300 300 600 390 425 700 485
Corporation 165 300 228 195 350 300 * * * 425 425 425
of London
Central 115 550 210 120 750 295 220 675 365 240 975 500
London
Other 65 650 156 58 850 196 53 955 240 145 800 325
boroughs
All boroughs 65 650 170 58 850 200 53 955 250 145 975 346
Source: Greater London Authority February 2004
Noses: * No data recorded.
When considering the minimum and maximum rents in this table, reference should be made to the sample numbers in Table 2 on which
these figures have been based.
Data limitations – see page 4.
For a list of central London boroughs, see the Glossary on page 4.
Table 4 Mean weekly rents (£) for postcodes in central London
boroughs – November 2003
One bedroom Two bedrooms Three bedrooms
Mean Number Mean Number Mean Number
£ £ £
N1 206 43 282 36 358 19
N4 161 30 209 27 270 19
N5 190 12 233 4 346 4
N6 185 14 251 18 294 4
N7 179 15 244 9 260 3
N19 169 11 222 5 265 3
NW1 220 29 300 14 348 10
NW3 231 36 316 23 375 10
NW5 189 4 260 2 316 7
NW6 198 34 274 40 370 30
NW8 228 21 335 13 360 3
SW1 250 19 358 12 750 1
SW3 266 9 338 9 * *
SW5 232 11 332 9 * *
SW6 218 27 298 29 385 22
SW7 349 5 490 6 600 1
SW10 261 7 330 4 * *
W1 331 7 373 11 375 1
W2 233 23 351 11 509 6
W6 226 26 274 21 381 21
W8 271 13 335 9 455 5
W9 212 9 276 4 * *
W10 213 8 295 10 428 4
W11 244 16 351 16 491 3
W12 196 15 232 14 348 6
W14 216 13 316 12 419 5
EC 240 35 324 30 585 1
WC 288 9 450 1 * *
Source: Greater London Authority February 2003
Notes: * No data recorded..
The figures for postcode districts N4, N6 and NW6 relate to the whole district and not just that part that lies within the boundaries of
central London boroughs.
For data limitations - see page 4.
Table 5 Rents of ‘free market’ private tenancies by region (ODPM)
Year £s per week
1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02
and and and and and and and and and
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03
combined combined combined combined combined combined combined combined combined
North 55 62 65 61 59 55 59 70 72
East
North 60 65 71 64 66 76 76 77 79
West
Yorkshiire 54 60 61 62 62 65 66 68 75
& the
Humber
The North 57 63 67 63 64 68 69 72 76
East 53 58 59 61 70 70 64 75 82
Midlands
West 61 63 69 70 65 64 73 79 82
Midlands
The 57 61 64 66 67 67 68 77 82
Midlands
East 69 75 78 82 82 83 89 94 96
South 63 65 71 73 78 82 84 91 95
West
South 89 89 90 97 101 102 109 119 135
East
London 112 116 127 133 141 148 151 165 189
England 76 81 86 88 90 93 97 106 116
Source: ODPM Survey of English Housing
2001-02 data used in this table were grossed by ODPM using control population totals for mid-2001 based on
the 2001 Census. This is the best estimate for 2001-02.
Table 6 Average monthly private rents by region – October 2003 (RICS)
£s per calendar month
1 bed flat 2 bed flat 3 bed semi 4 bed detached Weighted
Min Max Av Min Max Av Min Max Av Min Max Av Average
Yorkshire & 238 550 300 282 650 400 400 650 459 450 850 600 409
the Humber
North West 300 665 410 360 850 550 450 1,000 575 525 1,650 800 551
North East 217 350 330 260 500 350 375 650 525 500 1,050 750 437
East 217 425 300 238 525 375 303 595 469 475 1,125 650 403
Midlands
West 290 500 383 350 625 450 430 700 550 525 950 725 485
Midlands
East 320 630 400 350 750 500 488 900 650 600 1,800 850 558
South East 325 900 550 375 1,100 663 550 1,500 800 750 3,000 1,100 692
South West 325 600 404 370 800 519 450 800 600 500 1,000 800 539
Wales 235 350 295 280 500 325 300 600 468 375 867 638 328
Scotland 250 450 300 300 650 360 375 750 475 400 1,000 550 364
Greater 500 1,517 1,000 600 3,033 1,300 800 5,200 1,965 1,125 8,667 3,033 1,510
London
Great Britain 501 632 835 1,191 690
Great Britain 393 486 589 790 511
(excl.London)
Source: Royal Institution of Chartered Surveyors residential lettings survey – quarter to October 2003. Figures are
monthly rents for unfurnished properties. Average rent is a median of all responses from RICS surveyors.
If you have any ideas for how this bulletin could be
developed or improved, please send these to:
Chris Smith, Greater London Authority,
Housing & Homelessness Unit, 4th Floor, City Hall, London SE1
2AA (chris.smith@london.gov.uk)