London rental prices: will they rise or fall in 2024?

London is a popular place to live as it offers easy access to thousands of attractions, shops and restaurants. It can be useful to live in if you have to commute to a city-based office regularly. 

If you’re considering renting or buying a property in London, it’s worth exploring market trends and being in the know when it comes to the average cost of renting and whether prices are expected to rise or fall in 2025. 

What is the average cost of rent in London? 

According to Rightmove’s Rental Price Tracker, average Greater London rents have risen 3.7% in a year to a record £2,661 a month, driven by insufficient rental properties being available for prospective tenants.  

Sadly, this trend isn’t limited to London, as the average rental property is currently getting over 17 enquiries from prospective tenants to letting agents, more than triple the average (eight) in 2019. 

Will London rent prices rise or fall in 2025? 

It’s bad news if you want to live in London as the average monthly rent is expected to rise even further.

According to Property Reporter, London rentals could see an average cost increase of 7% by 2025.

With Londoners already spending around 40% of their earnings on rent, this is likely to worsen as they’ll have to pay even more for accommodation potentially.

Should I rent or buy in London? 

With the price of a London property reaching an average of between £340,403 and £1.2 million as of June 2024, it’ll be very expensive to buy your own home in the capital. 

A house deposit is usually the biggest barrier to home ownership, but soaring mortgage costs over the last year have made it even more expensive for those hoping to get on the property ladder.  

While it may be cheaper to rent in London for a short period, if you’re planning to live in the capital in the long term, it could end up costing you more. 

It’s a good idea to do your research to uncover the areas in London that are cheaper than average when it comes to renting or buying. 

Which areas in London have the highest and lowest rental growth? 

According to Savills, average rents in the UK will rise around 6% in 2025 due to the continued imbalance between supply and demand, echoing predictions made by Property Reporter.  

If you’re considering becoming a landlord in London, knowing where average rents have soared (or not) can be useful. 

Rightmove has revealed the areas in the capital with the highest and lowest rental growth and the average advertised rent as of the first quarter of 2024.

It’s also worth getting professional financial advice whether you’re looking for tax relief or a mortgage.

Unbiased can connect you to a local financial adviser, mortgage broker or accountant.  

5 areas in London with the highest rental growth 

Here are the areas in the city that have benefitted from soaring rental growth over the last year.

*As of the first quarter of 2024 

5 areas in London with falling rents 

Below are the areas in the city that have suffered a decline in asking rents.

*As of the first quarter of 2024 

Financial advice is essential whether you’re planning on renting or buying a property. 

Get expert financial advice

With the average price of rentals in London expected to increase by around 7% by 2025 and average house prices at up to £1.2 million, it’s essential to do as much research as possible to find an affordable deal on London rent.

Consider opting for one of the areas in London that have seen decreases in average asking rent in 2024 to protect your finances while securing your spot in one of the world’s leading business capitals.

Unbiased can connect you with a financial adviser who’ll look at your circumstances and recommend the best London rental options.