London is one of the most cherished cities in the world. It has much to offer residents and visitors who enjoy iconic attractions, culture, and history. 

 

The UK capital city is attractive in wildly differing aspects making it a location that is popular among tenants of all ages. 

 

The cost-of-living crisis and inflation continue to directly impact the local and overseas market. Having a firm understanding of how London compares to other places in the world will help landlords better understand the market and make a rational decision before committing to a location.

 

Rental property prices on a global scale

 

It is no secret that although London is one of the most admired cities on earth, it is also one of the most expensive.

 

In light of the cost-of-living crisis and rising interest rates, which continue to dominate UK headlines, property prices have soared. In a recent report, it was highlighted that the average rent in London reached a high of £533 a week. 

 

But how do these eye-watering figures compare to other cities across the globe?

 

ECA International analysed rental costs in over 420 locations as well as the price of consumer goods and services in over 490 international areas. The report concludes that Hong Kong is the most expensive with New York in second place, followed by Geneva and London ranking fourth.

 

Rents increased by more than 5% in New York, Singapore, London, and Los Angeles between December 2021 and June 2022. These cities experienced the highest levels of rental price growth.

 

Rental market changes are looming

 

Investment bank UBS state that housing bubbles in Zurich, Munich, and Hong Kong are at risk of bursting. Homes in Singapore, New York, and London are described by UBS as “overvalued” but not yet in the bubble-breaking territory.

 

The weakening pound will also have a direct impact on the London property market. This could make snapping up homes in the city more appealing to international investors. This is because it will get them more for their money. 

 

Rising interest rates could make more prospective buyers decide to rent instead. This in turn could contribute to an even higher level of competition.

 

The supply and demand imbalance continues

 

Current market conditions have been working in favor of landlords in London. More specifically the supply and demand imbalance has allowed landlords to push up rents.

 

Reports show in September 2022, there were 50% fewer new listings than three years ago. In addition to this, prices were 26% higher. 

 

Similarly, in New York, shortage of supply is increasing demand and rents are rising. Approximately 560,000 new units are needed by 2030 to overcome the housing shortage in the city.

 

The rental market is largely dominated by major cities Especially now as renters have returned to market post-pandemic restrictions. Leading international cities have re-gained their appeal.

 

Thanks to the plethora of opportunities the London housing market has to offer, the capital continues to attract tenants from all walks of life.  

As a top letting agent operating across Essex and East London, here at Ideal Locations we can help you to get the most out of your rental homes. For more information on our current operations, please contact us today.

We also offer a free online valuation to give you an estimate on how much your home could be worth on the current market.