Rents are still rising rapidly in the prime areas of London due to a shortage of homes available to rent against a background of high demand from tenants.
London property data consultancy LonRes, whose managing director Anthony Payne comments: “The shortage of homes to rent is limiting activity in the market with new lets well below normal levels.”
Payne says the prime London rental market in 2022 was characterised by a lack of homes available to rent and rapidly rising rents.
There is still a severe lack of property to rent amid a rebound in demand as people returned to live, work, and study in London, post-pandemic. This lack of available homes has meant a fall in the number of new leases in the market.
LonRes says there could be several reasons for this decline – some suggesting a short-term effect and others more long-term. These include a temporary rebound from the pandemic, landlords selling their properties, and a shift to longer-term tenancies where tenants remain for longer in the property to avoid higher rentals in the market.
This lack of homes on the market to rent and high tenant demand has pushed prime London rents to new record highs in 2022. Rents ended the year 13.7 per cent higher than in 2021 and 19.8 per cent higher than the pre-pandemic average.
Payne concludes: “A shortage of property, but no shortage of tenants continues to put pressure on rents taking them to new highs. At the end of 2022 prime London rents stood 13.7 per cent higher than they had been a year earlier.”