London has been named the most expensive city for rental accommodation in Europe, for the third consecutive year.
Last year, rent in London was £3,693 more expensive than the average monthly cost in Europe, according to figures from consultancy firm ECA International.
The average price of an unfurnished, mid-market, three-bedroom apartment in the capital costs around £5,398 per month, almost £4,000 more expensive on average than other major cities in the UK.
The research compares the rental costs of accommodation in areas that are normally inhabited by expatriate staff, such as New York and Hong Kong.
Alec Smith, accommodation services manager at ECA International, said Manchester, Edinburgh and Glasgow had seen the biggest rent increases in the UK due to high demand for rental property.
Contrastingly, Aberdeen saw rental prices fall by 16% as a result of employers sending staff back to their home locations as a result of to the downturn in the oil and gas industry.
While London’s rents were ranked the most expensive in Europe, it dropped into fifth place in the world behind Port Morseby in Papua New Guinea, due to the pound’s fall in value following the Brexit vote.
“Changes to stamp duty in 2016 led to a rush from landlords to purchase buy-to-let properties, which increased the supply of rental accommodation across prime areas in London,” said Smith.
“This increased competition among landlords contributed to modest falls in average rent in the UK’s capital, although it is still the most expensive in Europe.”
Ireland’s capital Dublin had one of the highest rent increases in Europe, resulting in it entering the top 10 of most expensive cities for rental accommodation for the first time.
“The past 10 years have seen a significant turnaround in the fortunes of Dublin’s residential market. The global financial crisis exposed a property bubble in the Irish capital and rents have increased significantly with each subsequent year of recovery,” said Smith.
He added that the cost of rents were also affected by elevated demand from international companies relocating staff while attempting to take advantage of the low corporate tax rate on the island.
Eastern European cities such as Prague and Warsaw also saw sharp increases in rental prices, climbing more than 10 places in ECA International’s rankings.
Hong Kong remained the most expensive place for rental accommodation in the world with rent averaging around $10,461 (£7,588) per month, while in the US, New York remained the most expensive for expats in the US, despite prices falling in the last year.