Two-speed Rental Market Deepens as Rents for One-bed Properties Outpace Those of Larger Homes in 50% of London
- The cost of renting a one-bedroom home is rising faster than rents for larger properties in 50% of London boroughs, a new analysis by flexible co-living brand Gravity Co reveals.
- Kensington and Chelsea has the biggest gulf between the rental price growth of the smallest and largest homes in the capital, followed by Hammersmith and Fulham
- This mismatch has a disproportionate impact on single people and couples without children, and stems from a “perfect storm of rising demand and falling supply”
- The analysis demonstrates the urgent need for more homes to rent and the growing appeal of purpose-built rental accommodation as a way to boost supply
The cost of renting a one-bedroom property is rising faster than rents for larger homes in 50% of London boroughs, a new analysis by the flexible co-living brand Gravity Co has found.
A perfect storm of surging demand from tenants, combined with a shortage of homes to rent as buy-to-let landlords exit the market, drove up average rental prices by 4.9% across the UK in the 12 months to the end of March.
But the national picture masks regional disparities, especially when it comes to the most in-demand smaller properties. In many areas, limited supply is forcing prospective tenants to compete for properties, driving up rents and making flat-hunting stressful as multiple people bid for the same home.
The analysis of the most recent ONS data suggests that people who want to live alone, or in a couple, are seeing even greater price increases than those seeking bigger properties in 16 out of 32 London boroughs. This is likely to have a disproportionate impact on younger people and those without children, who tend to search for one-bedroom properties.
In Kensington and Chelsea, the average cost of renting a one-bed property has risen nearly five times faster than the average rent for a three-bed property. The monthly cost of renting a one-bedroom home in the area has risen by 9.7% on an annual basis to £1,950, while that of a three-bed home has risen by just 2% in comparison.
Rising cost of renting a one-bed vs three-bed home
| Area | Cost for one-bedroom home in Sept 2022 | Price growth for one-bedroom home | Cost for three-bedroom home in Sept 2022 | Price growth for a three-bedroom home | Difference in price growth for one-bed v three-bed |
| Kensington and Chelsea | £1,950 | 9.7% | £4,200 | 2% | 4.8 times faster |
| Hammersmith and Fulham | £1,450 | 3.6% | £2,498 | 1.1% | 3.4 times faster |
| Hounslow | £1,150 | 9.5% | £1,650 | 3.1% | 3 times faster |
| Waltham forest | £1,125 | 2.3% | £1,663 | 0.8% | 2.9 times faster |
| Westminster | £2,058 | 11.7% | £3,770 | 5.5% | 2.1 times faster |
Gravity Co’s research highlights the urgent need for more homes to rent around the capital, including purpose-built rental accommodation. Co-living build-to-rent developments can significantly boost supply, giving would-be tenants more choice at a fixed price, and sparing them the stress of having to outbid others in order to find a home.
Gravity Co’s apartments also come with the certainty of all-inclusive utility bills, meaning tenants’ energy, water and broadband costs are all covered. Members also have access to events and partner discounts to save them further costs on a day-to-day basis.
Gravity Co is a co-living and PRS brand focused on community, flexibility, wellbeing and professional growth.
Riccardo Tessaro, Co-Founder & CEO of Gravity Co, comments:
“In the current frantic rental market, finding a place to live can be incredibly challenging. The perfect storm of rising demand and falling supply isn’t just pushing up average rents — in some areas it’s forcing would-be tenants to outbid rivals just to secure a place to live.
The shortage of one-bedroom flats in some parts of London is impacting young and single people more than most, making it even harder for them to find a home of their own.
Not everyone wants to buy a home, or is in a position to, so it is vital that there are adequate rental properties available in the UK.
Build-to-rent developments, which provide homes for a great number of people on one site, don’t just offer a comfortable and safe place to live — they can help build communities too.
Our offering provides instant access to a social network for our members, helping them make new friends and build work connections. Members also pay just one simple monthly amount, which includes all their utility bills — which makes budgeting easier during the cost-of-living crisis.”
Featured Photo by Ivan Bandura on Unsplash
