London rent prices: which areas have the highest and lowest average prices?
4-minute read
Knowing the average rent in London is important for buy-to-let landlords, especially if you’re thinking about purchasing a property somewhere within its sprawling cityscape.
The rent you receive will be offset by your buy-to-let mortgage, if you have one. But understanding rent prices in London also helps you work out potential rental yield, as well as set prices that influence who your property (or properties) will appeal to. Keep in mind that rent prices can also determine how quickly your property is let.
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How much is rent in London?
According to HomeLet, the average rent in London for new tenancies is £1,665 a month. HomeLet also say that rents in London have increased by 3.1 per cent compared to last year.
But rents can of course vary depending on lots of factors, including the location and number of bedrooms. Take for example the average rents in Croydon and Westminster – at oppostite ends of the spectrum – of £1,136 and £2,526 respectively, according to HomeLet.
Below we take a look at London rent prices based on the location and number of bedrooms. They’re based on statistics from the Valuation Office Agency, covering July 2018 to June 2019.
You can use this article as a guide and a springboard for conducting your own research into good locations for buy-to-let properties.
Average rent in London for rooms, studio and one bedroom properties
Single rooms and one bedroom and studio properties are often popular with young professionals moving to the capital or deciding to strike out on their own.
Low rental prices can often be a boon for these sorts of properties, as they’re likely to appeal to those who are renting by themselves – dependant on location, of course.
Bexley, Havering and Sutton have some of the lowest average rents in the capital for rooms, studio and one bedroom properties. If you’re looking to appeal to young professionals, properties in those areas with good transport links could be a worthwhile investment.
As you might expect, the highest average rents in London for rooms, studio and one bedroom properties can be found much closer to the centre. Kensington and Chelsea, Camden and the City of London all place highly for these properties.
Highest average rental prices for studio and one bedroom properties in London
These are the postcodes in London with the highest average monthly rent for studio and one bedroom properties. We’re only including locations where the Valuation Office Agency shows complete data for both studio and one bedroom properties.
| Location | Studio | One bedroom |
|---|---|---|
| EC2Y, Barbican | £2,154 | £2,486 |
| W1U, Marylebone | £1,780 | £2,509 |
| SW1W, Victoria | £1,692 | £2,137 |
| SW7, South Kensington | £1,464 | £2,362 |
| W8, Kensington | £1,308 | £2,258 |
W1H also places highly – we’ve left it out of the table due to it being in a similar area to W1U.
Lowest average rental prices for studio and one bedroom properties in London
These are the areas in London with the lowest average monthly rent for studio and one bedroom properties.
| Location | Studio | One bedroom |
|---|---|---|
| CR8, Purley | £728 | £836 |
| RM8, Dagenham | £688 | £884 |
| SM6, Wallington | £208 | £236 |
| SE25, South Norwood | £728 | £904 |
| IG3, Ilford | £727 | £919 |
Also CR7, CR2, RM1. Bromley and Dartford postcodes (BR and DA) also feature some low average rental prices for studio and one bedroom properties in London.
Average rent in London for two and three bedroom properties
Two and three bedroom properties have a varied audience. From families to sharers, the type of tenants you’re likely to get in these properties will depend more on other features (such as outdoor space and bedroom size) as well as local services.
For these types of properties, Bexley, Havering and Sutton again have some of the lowest average rents. Lots of east London boroughs also have low rents for two and three bedroom properties – areas like Barking and Dagenham, Redbridge, and Waltham Forest (in the north east of the capital).
But east London is one of London’s buy-to-let hotspots as, though the rental prices are low, the yield is high. A simple way to calculate rental yield is by taking the yearly rental income and dividing it by the purchase price and costs. In east London, Stratford and East Ham have some great rental yields. And across the river to south-east London, the aforementioned Bexley is great for rental yield too.
At the other end of the spectrum, Kensington and Chelsea, Camden and the City of London all feature again for two and three bedroom properties, as do Hammersmith and Fulham, Hackney and Islington.
Highest average rental prices for two and three bedroom properties in London
These are the postcodes with the highest average monthly rent prices in London for two and three bedroom properties.
| Location | Two bedroom | Three bedroom |
|---|---|---|
| W1K, Mayfair | £5,723 | £13,700 |
| SW1X, Belgravia | £4,521 | £7,753 |
| SW7, South Kensington | £3,610 | £5,781 |
| W8, Kensington | £3,662 | £5,683 |
| SW3, Chelsea | £3,334 | £5,060 |
Other postcodes with high average rent prices include W1W, SW1W, W1U, and W1H.
Lowest average rental prices for two and three bedroom properties in London
These are the areas in London with the lowest average monthly rent for two and three bedroom properties.
| Location | Two bedroom | Three bedroom |
|---|---|---|
| RM13, Rainham | £1,014 | £1,301 |
| SE2, Abbey Wood | £1,072 | £1,285 |
| SE28, Thamesmead | £1,155 | £1,292 |
| UB4, Hayes | £1,245 | £1,244 |
| BR5, Petts Wood | £1,092 | £1,442 |
Lots of RM postcodes feature in the list of lowest rent prices, as well as DA postcodes if you’re looking further afield (Dartford is technically classified as Kent).
Average rent in London for four or more bedroom properties
Four or more bedroom properties can be trickier to rent, and are often more likely to be occupied by students and sharers than families. If you do rent to multiple sharers (even if your property is smaller than four or five beds) then you may legally be required to have an HMO license, so speak to the local authority when considering purchasing a property of that size.
The usual suspects featured above also dominate the highest and lowest average monthly rents for four or more bedrooms. Newham and Greenwich are other areas with low averages for these types of property, with Wandsworth, Lambeth and Barnet also featuring high in the table.
Highest average rental prices for four and five bedroom properties in London
These are the areas in London with the highest average monthly rent for four or more bedroom properties.
| Location | Four or more bedrooms |
|---|---|
| W1K, Mayfair | £20,518 |
| SW1X, Belgravia | £12,029 |
| SW3, Chelsea | £10,343 |
| W8, Kensington | £10,090 |
| SW7, South Kensington | £9,859 |
For other locations with high average London rents, there’s N6, SE1, and NW5.
Lowest average rental prices for four and five bedroom properties in London
These are the areas in London with the lowest average monthly rent for four or more bedroom properties.
| Location | Four bedroom |
|---|---|
| SE2, Abbey Wood | £1,355 |
| TW13, Feltham | £1,524 |
| RM8, Dagenham | £1,546 |
| UB2, Southall | £1,658 |
| IG11, Barking | £1,677 |
Again RM and DA postcodes feature in the list of lowest average rents, as do SE postcodes (SE12, SE9, SE18) and postcodes in east London (E4, E6).
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