London rents 'highest in Europe'

Executive rents in London are the sixth highest in the world

Rents in London for executive-style accommodation are the most expensive of any European city, a survey suggests.

The monthly rent on an unfurnished three-bedroom flat last year was £3,034 - almost twice as much as a similar flat in Paris and an increase of £158 on 1998's rents.

London was the sixth most expensive city in the world in which to rent a flat, costing only £38 less than New York, according to the report by human resources consultancy ECA International.

Tokyo was the most expensive city in the world with monthly rents of £4,492 the norm.

Monthly executive rents

Tokyo: £4,492

Hong Kong: £4,464

Beijing: £3,485

Moscow: £3,163

New York: £3,072

London: £3,034

Helsinki: £776

Karachi: £349

Karachi, Pakistan, was the cheapest place in the world studied by the survey, with an average monthly rent of only £349 for an executive apartment.

The cheapest EU country was Helsinki with rents for executive flats at £776 a month - 25% of London's prices.

Sylvia Manneh, research analyst at ECA, said higher rents were inevitable as house prices in the UK continued to rise last year.

"It has affected the rental market as more home-owners preferred to sell rather than rent their properties and many families found themselves renting a place to live during the house-hunting process," she said.

"The scarcity in rented accommodation has resulted in a rise of 5.49% in rental costs in 1999."

But she predicted new 'buy-to-let' initiatives would result in a surplus in the rental market.

"Prices are therefore expected to level out in the coming year," she said.