rent

London is most expensive city in Europe for expat rents despite Brexit

by Ray Clancy on January 17, 2018

London is the most expensive place in Europe for professionals to rent a home and almost four times more costly than any other city in the UK, new research shows.

Despite Brexit London is still popular for expats but it comes at a price with the average rent coming in at £5,398 per month compared with £1,427 per month in other British cities.

(IR Stone/Bigstock.com)

Dublin rental accommodation has entered the top 10 most expensive in Europe for the first time at £2,688 per month and overall the biggest rent increases in the UK have been in Manchester, Edinburgh and Glasgow which the firm says is due to high demand.

The second most expensive city to rent in Europe is Moscow, followed by Zurich, Geneva and Istanbul while Hong Kong is the most expensive in the world, according to the research from ECA International which has been conducting research into accommodation costs for international executives for more than 20 years.

Although London rent for professionals still remains the most expensive in Europe, the drop in value of the Pound has caused London to drop a position in global terms, moving down to fifth, overtaken by Port Moresby in Papua New Guinea.

‘In London there is still a large amount of uncertainty in the financial sector in light of the Brexit vote. It remains to be seen whether financial regulation in the City is likely to change much post-Brexit,’ said Alec Smith, ECA accommodation services manager.

He explained that changes to stamp duty, the property tax paid when buying a home, in 2016 led to a rush from landlords to purchase buy to let properties, which increased the supply of rental accommodation across prime areas of London. ‘This increased competition among landlords contributed to the modest falls in average rent in the UK’s capital, although it is still the most expensive in Europe,’ he pointed out.

He also explained that the last 10 years have seen a significant turnaround in the fortunes of Dublin’s residential rental market. ‘The global financial crisis exposed a property bubble in the Irish capital and rents have increased significantly with each subsequent year of recovery. The cost of renting has also been affected by elevated demand from international companies relocating staff while looking to take advantage of Ireland’s low corporate tax rate,’ he said.

Similarly, Eastern European cities have also seen sharp increases in rental prices by almost £2,000 per month with both Prague and Warsaw climbing over 10 places in our rankings compared with last year.

‘The local economies of Prague, Warsaw and similar major Eastern European cities have strengthened relative to the Eurozone as a whole in recent years. International companies are setting up or expanding their operations in these economies, bolstering demand for quality accommodation,’ explained Smith.

With a high population density and a consistently limited supply of property, the average rent in Hong Kong continues to remain more expensive than in other high profile Asian cities and in other major cities around the world.

Lee Quane, Asia regional director for ECA International, said that rents have risen slightly in the past 12 months. However, despite the high rental costs in Hong Kong, rent for the type of accommodation featured in the research remains lower than it was in 2012.

Accommodation costs in many locations in China have increased in the past 12 months. Shanghai is the most expensive location in mainland China, and the third most expensive location in the Asia region.

In the United States New York remains the most expensive place for expat rental, despite rental prices falling in the last year. This is in contrast to other popular US cities such as San Francisco and Miami where rents, and their place in the cost rankings, have continued to rise.

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