Real cost of renting in London revealed

London is leading the way in terms of rising house prices but residents are also being hammered by other cost increases.

High property costs - both to rent and buy are revealed in the annual London Factor research from Halifax which provides an outline of the current financial and social advantages and disadvantages of living in the capital.

At £310,116 the average house price in London is over £136,000 (79%) above the UK average of £173,687.

Indeed, property prices in the capital have held their value better than the UK average since 2007, with average prices currently only 4% below their peak compared to 13% nationally.

Around half (49.5%) of London’s homes are occupied by their owner; the lowest owner occupation rate in the UK (64.3%). Outright ownership is also the lowest in London, at a fifth (21.1%) compared to 30.8% nationally.

In terms of housing costs, London is the most expensive place to own and run a house in the UK, with the average cost, at £12,094, close to £2500 above the UK average of £9590.

And renting is more expensive than buying in the capital. In London homeowners typically pay 8% (£98) a month less than the average London private renter.

Londoners in full time employment benefit from earnings which average 32% higher than the UK monthly average of £2,774, and the average Londoner's disposable income is 28% higher than the national average.

However, the cost of London living is greater than anywhere else in the country; and Londoners have the lowest levels of savings relative to annual gross earnings (22% compared to the UK average of 29%).

Martin Ellis, Halifax Economist, said: “As a leading global city, London provides major economic, social and cultural benefits not just to those who live there but also for the rest of the country.

"Employment growth has been higher than elsewhere in the UK in recent years, while average earnings in the capital are 32% higher than the UK average.

"On the other hand, living in London is more expensive than in any other region. So perhaps it not surprising Londoners, on average, also have the lowest savings in proportion to average earnings in the UK."