Rents across London have soared by nearly 40% over the past decade but when adjusted for inflation, the real-terms increase is barely noticeable, according to new research from estate agency Benham and Reeves.
The analysis, which looked at average rental values across all 32 London boroughs between May 2015 and May 2025, found that while nominal rents rose by 39.2%, the real increase once adjusted for inflation using the Consumer Prices Index (CPI) was just 0.7%.
Average monthly rents in the capital climbed from £1,616 to £2,249 over the 10-year period – an increase of £633.
But in today’s money, that equates to just £15 more per month in real terms, casting doubt on the widespread belief that surging rents are purely driven by landlord profiteering.
FLAT RENTAL GROWTH
The findings come amid renewed scrutiny of the private rented sector as policymakers debate rent controls, landlord licensing and planning reforms.
The data suggests that much of the pressure on tenants may be macroeconomic rather than the result of unchecked rent inflation.
Marc von Grundherr, Director of Benham and Reeves, says: “There’s a perception that landlords are cashing in at tenants’ expense.
“But the data tells a different story. Once inflation is factored in, rental growth across much of London has been flat – and in some areas, it’s gone backwards.”
Indeed, 12 of London’s 32 boroughs have seen rents fall in real terms over the last decade.
Westminster led the declines, with rents down 4.9% after inflation – a £168 monthly drop. Other high-value areas such as Richmond upon Thames (-3.9%), Camden (-3.1%), Kingston (-2.8%) and Kensington & Chelsea (-2.3%) also saw real-terms declines.
AFFORDABLE BOROUGHS
By contrast, more affordable outer boroughs posted the strongest real-terms growth. Barking and Dagenham topped the list with a 16.5% rise (£229 more per month), followed by Havering (16.3%), Bexley (14.3%), Redbridge (12.0%) and Waltham Forest (7.4%).
Von Grundherr argues that the figures highlight broader structural issues in the rental market.
“Landlords are navigating higher borrowing costs, tighter regulation, and rising taxes,” he says. “Yet in most areas, those pressures aren’t being passed on in full to tenants. The real challenge remains the chronic imbalance between supply and demand.”
