London is the most expensive city in Europe for renting a middle market, three bedroom home and almost three time more costly than other British cities, new research shows.
It costs £5,398 per month in London compared with £1,427 per month in other major UK cities and some £3,693 more expensive than the average monthly cost in Europe.
Dublin rental costs have also been rising and the city has entered the top 10 most expensive in Europe for the first time at £2,688 per month, according to the accommodation report from global mobility experts ECA International.
The data also shows that the biggest rent increases in the UK have been in Manchester, Edinburgh and Glasgow due to high demand for rental property. In Aberdeen, the downturn in the oil and gas industry means that the rental market has suffered a downturn of 16%.
Alec Smith, ECA International accommodation services manager, explained that although London rent for professionals still remains the most expensive in Europe, the drop in value of Sterling has caused London to drop a position in global terms, moving down to fifth, overtaken by Port Moresby in Papua New Guinea.
‘In London there is still a large amount of uncertainty in the financial sector in light of the Brexit vote. It remains to be seen whether financial regulation in the City is likely to change much post-Brexit,’ he said.
‘Changes to stamp duty in 2016 led to a rush from landlords to purchase buy to let properties, which increased the supply of rental accommodation across prime areas of London. This increased competition among landlords contributed to the modest falls in average rent in the UK’s capital, although it is still the most expensive in Europe,’ he added.
He pointed out that the last 10 years have seen a significant turnaround in the fortunes of Dublin’s residential rental market. ‘The global financial crisis exposed a property bubble in the Irish capital and rents have increased significantly with each subsequent year of recovery,’ said Smith.
‘The cost of renting has also been affected by elevated demand from international companies relocating staff while looking to take advantage of Ireland’s low corporate tax rate,’ he added.
Similarly, Eastern European cities have also seen sharp increases in rental prices by almost £2,000 per month with both Prague and Warsaw climbing over 10 places in the rankings compared with last year.
‘The local economies of Prague, Warsaw and similar major Eastern European cities have strengthened relative to the Eurozone as a whole in recent years. International companies are setting up or expanding their operations in these economies, bolstering demand for quality accommodation,’ explained Smith.
