London rents hit eyewatering average of £2,675 as homeownership falls further out of reach
Rents in London have grown faster than anywhere else in the country for the second month running, with the average hitting £2,675.
Londoners were found in February to already be dishing out more than 70 per cent of their monthly paycheck on their rent by city estate agent Benham and Reeves.
Though the figure has continued to snowball across the country, which fellow real estate agent Hamptons has revealed today will put £63bn into the pockets of landlords, having raked in £31bn in the first half of the year.
The amount paid by tenants has more than doubled since 2008.
It represents a major blow to homeownership amid a shortage of stock, with first time buyers spending £84bn on climbing the property ladder last year.
The massive figure is just a two per cent increase in comparison with 2021, because although rental prices in inner London alone rocketed more than a third following the easing of lockdown measures, they remain 6.5 per cent below their pre-pandemic peak.
Head of research at Hampton, Aneisha Beveridge, said the record-breaking costs have been driven by “a lack of homes available to rent alongside investors passing on higher running costs to tenants,” which has disproportionally hit the younger generations itching to fly the nest.
Generation Z have been out-paying their parents in terms of rent, as bills rise at a faster pace than even the next generation along, Millenials.
The younger generation, born between 1997 and 2021, are expected to spend £11.7bn on rent this year, just £2bn less than renters of all ages in the first half of 2008.
“Generation Z are joining the rental market faster than any previous generation, mostly because fewer are likely to become young homeowners,” added Beveridge.
“It will take a significant uplift in homeownership rates over the next five or so years to stop Generation Z paying more in rent than Millennials, which seems unlikely as interest rates and house prices continue to rise.”