Prime London rents fall - but less than before

The prime London rental market is still in the doldrums but the rent falls are less pronounced than before. 

Knight Frank says gradual growing demand is helping to reverse the rental value declines that have taken place in prime London property markets over the course of the pandemic. 

Underlining the extent of the increase, the number of new prospective tenants in the three months to May was 76 per cent higher than the first three months of 2020.

As a result, average rental values declined 12.2 per cent in prime central London in the year to May, which compared to a fall of 14.3 per cent in March. 

In prime outer London, the fall was 8.2 per cent compared to a decline that bottomed out at 11.7 per cent in February

The number of properties that rented in locations surrounding London’s two main financial districts increased by 21 per cent in April this year compared to March 2020.

In prime markets in the rest of London and the Home Counties, the number of tenancies started is also on the rise. 

In the three months to May, the figure was 24 per cent higher than the same period in 2019, Knight Frank data shows.

“Supply levels remain high due to the fact a large number of short-let properties transferred to the long-let market during the pandemic” says Tom Bill, head of UK residential research at Knight Frank. 

“However, there are signs more balance is returning, which is putting upwards pressure on rental values.”