London Rent Predicted to Increase at a Slower Pace Than Inflation in 2024

London's rent increases are expected to slow in 2024, with a projected rise of only 5% compared to the previous year's 9.7% growth, as stated in Zoopla's rental market report. This would mark the lowest rise in three years, reflecting a cooling rental market since the 11.9% increase recorded up to 2022.

This change follows a decrease in asking prices for new rentals and an influx of available properties. Data shows a reduction in listing prices for one in ten rental properties and a 5% price cut on 7% of nationwide listings.

Particularly in London, which saw a significant 17% rent hike last year, growth is set to slow dramatically to just 2% next year, trailing behind the projected inflation rate. The Bank of England suggests that overall price rises will soften to 3% by October.

The most significant deceleration in rent increases is expected within the mid-range market, specifically for properties costing between £1,000 to £1,500 per month.

Recent figures from the Office for National Statistics (ONS) provide no definitive evidence of private rents outpacing renters' incomes since 2013. While average basic wages rose by 7.8% in the three months leading to August year-over-year, inflation was recorded at 6.7% for the year to September. In the same period, rents increased by 5.5%.

Despite this, rents have climbed substantially over the past three years, with a near one-third (31%) increase reported by Zoopla. As of October, the average UK rent reached £1,201 per month, with the highest rates in London at £2,049, followed by Oxford at £1,611, and Bristol at £1,565 monthly.