fbpx

June sees inner London rents rise for first time since April 2020

Jake Carter

July 12, 2021

london

For the first time since April 2020, the average rent in inner London rose in June, up 4.3% on a monthly basis, according to data from Hamptons. 

Rents in this area now average £2,103 per calendar month (pcm).

During the COVID-19 pandemic, rents in inner London fell for 13 consecutive months, while rents in other regions reached record highs.

The average rental home in inner London still costs 16.5%, or £415 pcm less than it did this time last year.

Last month, the number of tenants registering to rent in inner London was up 16% on June 2020 levels and up 45% on June 2019.

Zone 2 recorded the strongest growth in demand, almost completely driven by domestic, rather than international tenants.

Rising rents have also been supported by lower stock levels, a reversal of the months following the height of the pandemic when landlords struggled to find tenants.

While back in September 2020 there were 14% more homes available to rent in Inner London than in September 2019, by June there were 8% fewer homes to rent than two years ago.

Family houses were found to be most scarce, while entry-level flats made up most of the homes taking more than a week to let.

Outer London rents recorded only six months of falls on an annual basis following the onset of the pandemic, and have grown for the last 10 months, with June’s annual rental growth (9.4%) the strongest on record.

The average rental home in outer London now stands at £1,685 pcm, 10% more than it did when the pandemic started in March 2020.

Across Great Britain the pace of rental growth continued to climb in June, with rents rising 8.5% year-on-year.

Four of the 10 fastest months for rental growth over the last decade have been since the onset of the pandemic.

Stock scarcity has become a pressing issue, with 46% fewer homes on the market than at the same time two years ago.

Outside London, rents rose by 10.9% annually – the fastest rate of growth recorded during any time since 2014. Six regions saw rental growth hit double digits in June, up from five in May.

Last month eight of the 11 regions recorded the biggest annual increases since the lettings index began in 2014.

Wales, the West Midlands and London were the only regions not to register record rental growth.

Aneisha Beveridge, head of research at Hamptons, said: “Over the course of the pandemic, Inner London landlords have suffered more than investors anywhere else in the country.

“But in recent months rental growth here has changed course and is now on an upward trajectory.

“We are forecasting that rents in Inner London will return to pre-pandemic levels within 12 months.

“That said, and despite a recovery, rents in Inner London are likely to remain lower than they would have been had the pandemic not happened.

“A relatively buoyant recovery has ensued as restrictions have been lifted, but some scarring is likely to remain as tenants become less closely bound to their office desk and international travellers remain in short supply.

“Nationally, the last 12 months have seen five years of pre-pandemic growth squeezed into a year.

“Rents are rising at such a pace that monthly rental growth figures could, in more normal times, be mistaken for annual ones.

“While this growth is underpinned by a lack of stock, it will ultimately be tapered by affordability.”


Sign up to our daily email