Londoners spent a record-breaking £32.1 billion on rent this year

 (Daniel Lynch)
(Daniel Lynch)

Eye-watering rises have seen London tenants spend £32.1 billion on rent this year – more than the combined rental costs of everyone in Scotland, Wales, the Midlands and the North East.

The average rent in the capital now costs £2,425 per month, 11.8 per cent more than in November 2022.

A new report from Hamptons estimated that renters in the UK will have spent £82.6 billion in rent in 2023.

That's "equivalent to the total value of all homes sold in London last year" said Aneisha Beveridge, head of research at Hamptons.

It's also twice what Brits spent on rent in 2010 and £8 billion more than rental costs in 2022, the biggest jump in rents since Hampton began keeping records in 2012.

Rents on new tenancies rose 10.2 per cent year-on-year across the UK.

Millennials could rent into retirement

Millennials spent the most on rent in 2023, with people born between 1980 and 1994 paying £36.8 billion on housing.

They also made up a record 58 per cent of renting households this year.

House prices may have dropped since the start of the year, but the end of low interest rates and mortgage hikes are keeping more people off the property ladder and renting for longer.

“An era of higher rates will likely mean that more millennials will be renting for the rest of their lives," said Beveridge.

"With the rate at which millennials climb onto the housing ladder slowing, they’re starting their own families and renting larger, more expensive homes which is pushing up the amount of rent they pay."

Gen Z saw the biggest annual rent hike

Gen Z's (born between 1995 and 2012) were close behind them, with a combined rental bill of £30.5 billion.

They paid £6.2 billion more in rent than in 2022, the biggest jump for any of the generations.

"Gen Z are set to start paying more rent than millennials in the next couple of years, that crossover is likely to come later and at a higher point," explained Beveridge.

Meanwhile Generation X, Baby Boomers and the Silent Generation saw their rental costs fall in 2023.

"This was driven by small numbers becoming homeowners later in life, rather than them paying less rent each month," said Hamptons.

The report calculated the country's total rent bill by multiplying the number of renting households in the UK by the annual rent on new lettings in their own database.

London's rental crisis snowballed in 2023, with tenants facing hikes of over 30 per cent.

Rental costs now take up almost 43 per cent of people's incomes, according to a recent report from Savills.