Undeniably, London is one of busiest residential real estate markets not only in Europe but also globally. With a population of nearly ten million, the megacity is the second biggest financial center in the world after New York, proving its attractiveness to investors, talent, commerce, arts, and culture. Housing in London is substantially more expensive than in any other region in the United Kingdom (UK). Homebuyers in 2023 spent on average 215,000 British pounds
for their first home or more than double what a property in West Midlands would cost them. Similarly, renters paid on average 800 British pounds more to live in the capital
How much does housing in London cost?
Living in London has its price, and it is a high one. The
average monthly rental costs could range from approximately 1,400 British pounds for a home in Croydon to over 2,000 British pounds in areas in the heart of the city – Westminster, Lambeth, Chelsea, Fulham, Hammersmith, and Kensington. Private renters
constitute the largest share of households in London as purchasing a house requires a substantial down payment and monthly mortgage payments. In Wandsworth, the
borough with the greatest number of housing transactions in 2022 and 2023, the average price of a residential property
amounted to 628,000 British pounds in August 2023. Should one opt for purchasing a home in London, the
average monthly costs could exceed 1,800 British pounds. Potential buyers save approximately 250 British pounds monthly from the
cost difference of buying over renting but should also be ready to set aside an average of o
ver 125,000 British pounds for a deposit.
Development of rental costs and house prices
While housing in London seems expensive, this can be explained by the high demand, development costs resulting from political uncertainty, climbing construction costs, and the weakening of the British pound. House prices and rents increased dramatically after the coronavirus pandemic, followed by a slight correction due to demand slowing in 2022. The development of the Index of Private Housing Rental Prices (IPHRP) shows that
rents have risen by over 20 percent since 2015, with the period after the onset of the pandemic experiencing the steepest rental growth. According to an October 2023 forecast, the
five-year rental growth for prime properties is to exceed 18 percent. On the other hand, the average price of mainstream housing is expected to grow at a
much slower pace and even fall in 2024.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
