The rental markets in London, Amsterdam, and Paris are experiencing significant shifts as of July 2024, each city facing unique challenges and opportunities. London’s post-election landscape has introduced regulatory uncertainties affecting both landlords and tenants. Amsterdam grapples with the effects of new rent control measures aimed at balancing affordability with market stability. Paris, currently hosting the 2024 Summer Olympics, sees the surge in short-term rentals tightening the long-term housing supply. These evolving dynamics are reshaping the rental landscape in these vibrant European capitals. For residents and newcomers alike, understanding these complex market conditions is essential for navigating the increasingly competitive rental markets.
London Rental Market Latest
The London rental market remains highly competitive in July 2024, with demand continuing to outstrip supply. According to the latest data from Rightmove, average advertised rents in London have reached £2,652 per calendar month, reflecting a 4% increase compared to the same period last year. This is significantly lower than the double-digit growth seen in recent years. Interestingly, London now has the joint smallest increase in yearly rents of all regions in Great Britain.
This slowdown in rental price growth can be attributed to an improving balance between supply and demand in the capital. The city has experienced a 15% decrease in the number of tenants looking to move, coupled with a 16% increase in the number of available rental properties.
Despite this moderation in growth, affordability remains a significant concern for many renters in London. The current average rent of £2,652 per month is still substantially higher than in other parts of the UK, reflecting the ongoing challenges in the London housing market.
The recent general election, which resulted in a landslide Labour victory, has created new uncertainties surrounding rental market regulations, including the future of the Renters Reform Bill. This uncertainty is affecting both landlords and tenants, potentially impacting investment decisions and market dynamics.
Looking ahead, City Hall forecasts that average rental costs in London are expected to jump to over £2,700 a month in the near future. With Londoners already spending around 40% of their earnings on rent, this trend is likely to exacerbate affordability issues.
Average Monthly Rents in London
London’s average rental prices as of July 2024 were as follows:
- A one-bedroom apartment in central London: €2,153 pcm
- A one-bedroom apartment in the suburbs: €1,630 pcm
- A three-bedroom apartment in the city centre: €4,465 pcm
- A three-bedroom apartment in the suburbs: €2,899 pcm
Amsterdam Rental Market Latest
In Amsterdam, the rental market remains tight as of July 2024. Rental prices have risen steadily in recent years, driven by constant demand for housing, particularly from expats and students. The average rent per square metre is now around €24.2, resulting in nearly €2,000 per month for an 80 square-metre flat.
The recent implementation of the Affordable Rent Act is expected to have a significant impact on the housing market. This Act primarily targets the middle rent segment, which currently covers about 9% of the rental market. While it aims to make housing more affordable, it may also lead to landlords selling their properties due to lower returns, potentially reducing the overall supply of rental homes.
Distribution of Housing: About 28.9% of Amsterdam’s housing supply consists of owner-occupied houses. Private rental housing accounts for approximately 32%, while social rented housing makes up about 40%.
Middle Rent Segment: The Affordable Rent Act focuses on this segment, which could lead to lower rents, but may not reduce overall housing costs due to other expenses like utilities and maintenance.
The Affordable Rent Act also creates a clearer distinction between regulated rental properties, free sector rental properties, and owner-occupied properties. Prices in the free sector rental segment may rise as this segment becomes smaller and remains less regulated. If landlords decide to sell their properties, this could further reduce supply and force tenants to look for housing in surrounding municipalities, increasing demand in those areas as well.
Average Monthly Rents in Amsterdam
Amsterdam’s average rental prices as of July 2024 were as follows:
- A one-bedroom apartment in central Amsterdam: €1,983 pcm
- A one-bedroom apartment in the suburbs: €1,638 pcm
- A three-bedroom apartment in central Amsterdam: €3,389 pcm
- A three-bedroom apartment in the suburbs: €2,534 pcm
Paris Rental Market Latest
The Parisian rental market is still undergoing significant shifts as the 2024 Summer Olympics are currently underway. The anticipation of increased demand during the Games led many property owners to favour short-term rentals, thus reducing the availability of long-term housing options. Short-term rental prices have risen by 2 to 2.5 times since the start of the year.
Despite the overall impact of the Olympics, occupancy rates have seen a surprising decrease due to a significant increase in vacation rental listings. The total listings have increased from 74,386 during the same period last year to 140,539 during the event. Higher prices charged by vacation rentals can also deter some potential guests. The influx of visitors during the Olympics is expected to drive continued demand for both short- and long-term accommodations even after the event concludes, contributing to a tightening of the rental market.
Average Monthly Rents in Paris
Paris’ average rental prices as of June 2024 were as follows:
- A one-bedroom apartment in central Paris: €1,311 pcm
- A one-bedroom apartment in the suburbs: €980 pcm
- A three-bedroom apartment in central Paris: €3,021 pcm
- A three-bedroom apartment in the suburbs: €2,135 pcm
Underlying Factors
Several factors are influencing these rental market changes across the three cities:
- Economic Uncertainty: The ongoing economic challenges, including inflation and interest rate fluctuations, continue to impact both landlords and tenants.
- Regulatory Changes: New and proposed regulations in all three cities are reshaping the rental landscape, affecting both supply and demand dynamics.
- Housing Shortages: Persistent housing shortages in these major urban centres continue to drive up prices and create competitive markets.
- Changing Work Patterns: The lasting effects of remote and hybrid work arrangements continue to influence housing preferences and rental market trends.
- International Events: Major events like the Paris Olympics are having significant short-term and potentially long-term effects on the local rental market.
Relocating and Need to Secure a Property?
Adleo Relocation has established agents working across London, Amsterdam and Paris. We have enviable relationships with each city’s leading real estate agents and property finders, so please get in touch if you need help with the local rental market.
*Average monthly rental figures, expressed in euros, rounded & taken from Numbeo, 31st July 2024.
