For the sixth month in a row rents in prime living locations in London have risen, with rental prices for the end of August 2011 up nearly 25 percent more than their 2010 equivalent. Even in less fashionable parts of the capital rents are climbing with the average increase of around 14.5 percent on last year’s prices.
This is unwelcome news for people planning to move to London, and will no doubt add to their worries about relocating to the city. Certainly US expats planning to move to London will need to bear these increases in mind, especially if they are currently negotiating a relocation package with their employer. The continued rise in rents can also affect the finances of Americans already living in London who may find that they may have to pay quite a bit more rent when they renew in their lease.
Now the summer months are usually the busiest time of year as far as renting is concerned. Many foreigners (including US expats) leave the capital during the summer, which has helped to bump up the number of homes available to rent in London. This should have pushed rental prices down. However, according to one leading London realtor rental prices have continued to rise in prime locations due to the unprecedented demand from international relocations.
It seems there has been strong demand for rented accommodation in London’s nicer neighbourhoods from immigrants moving to London – especially those from Europe and Asia-Pacific. Although there are still lots of US expats living in London (and more will move to London in the future) most people immigrating to the UK come from the European Union. It seems that they are the reason why London rental prices have continued to climb, especially in its nicer neighborhoods.
Unfortunately for people about to move to London or already renting and living in London, it is unlikely that rental price will fall anytime soon. It has been suggested that by December of this year the average rents in prime areas of central London may increase to £1,052 per week or £4,442 per month (around $1,725 and $7,475 respectively). For tenants already living in London who are about to negotiate a renewal of their lease these increases will mean that they may be paying around £780 ($1,280) more rent over the course of the year. This is a sizable increase in living expenses for any tenant, yet the high demand for rental accommodation means they may struggle to find somewhere more affordable.
Adding to the woes of US expats living in London are the continued fluctuations in the dollar to sterling exchange rates, with both currencies affected by economic uncertainties. Inflation too is rearing its ugly head and continues to rise in the UK, and may reach 4 percent by the end of the year… It seems that US expats in London (even those with deep pockets) may be in for a bumpy ride over the coming months as far as the currency markets and cost of living increase are concerned.