Over the first half of 2022, the ongoing lack of properties available - coupled with extremely high demand - is predicted to keep applying pressure to prime London and commuter belt rents for the foreseeable future.
Now able to look back over the first half of 2022, we can see the steep rise in prime rents across London as a whole. During this time, 171% more enquiries by tenants looking for rental properties were reported compared to pre-pandemic levels. However, as the post-Covid recovery in London continues to move ahead, it looks as though things will eventually level out.
It’s important to note, however, that recovery in London is undeniably taking place, with rental values increasing by 3.3% in just the last three months alone. This in turn left annual growth at its highest level in over twenty years, more than offsetting the decline seen during the pandemic. As such, the average monthly asking rent in London now stands at £2193, a 14.3% increase on last year.
As the capital comes back to life and key demographics return (office workers, international students, etc.) the recovery of some of the boroughs most affected by Covid have really made a difference. These include parts of Central, North West and South West London. The market for flats is also bouncing back, with growth significantly higher than that for houses.
Across London’s commuter belt, rents increased by 2.1% over the first six months of 2022, leaving them 15.3% higher than in 2020. Upward rental pressure in this area continues due to significant tenant demand during the pandemic. Property agents report that it was, at least in part, due to families looking for more space and those as yet unable to buy.
Despite changes in government, it seems likely proposals for the reform of the private rental sector are set to go ahead as planned. Under these new regulations all current Assured and Assured Shorthold Tenancies (ASTs) will be converted to periodic tenancies in a move similar to one made in Scotland six years ago. This would give tenants increased security of tenure, leaving most landlords to rely on specific statutory grounds when recovering possession of their property.
Source: The Guardian, U.K. Land Registry