Connells-owned high end agency Hamptons has declared the bottom of the rental market for Inner London, saying it’s now on the way back after 13 months of falling rents.
For the first time since April 2020, the average rent in Inner London rose on a monthly basis, averaging £2,103 pcm in June.
While the average rental home in Inner London costs 16.5 per cent or £415 pcm less than it did this time last year, rents jumped 4.3 per cent month-on-month between May and June, the largest monthly increase on record.
June was also the third straight month that the annual decline in rents slowed.
The reversal in the direction of rental growth has been driven by more tenants returning to the capital.
Last month, the number of tenants registering to rent in Inner London was up 16 per cent on June 2020 levels and up 45 per cent on June 2019.
Zone 2 recorded the strongest growth in demand, but this has been almost completely driven by domestic, rather than international tenants. Here, the share of tenants coming from outside the capital doubled as more people planned their return to London.
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 long-term tenants for their short-term lets.
While back in September 2020 there were 14 per cent more homes available to rent in Inner London than in September 2019, by June there were eight per cent fewer homes to rent than two years ago.
Family houses are most scarce, while entry level flats make up most of the homes taking more than a week to let.
In contrast to Inner London, Outer London rents recorded only six months of falls on an annual basis following the onset of the pandemic.
Outer London rents have grown for the last 10 months, with June’s annual rental growth (9.4 per cent) the strongest on record.
The average rental home in Outer London now stands at £1,685 pcm, which is some 10 per cent more than it did when the pandemic started in March 2020.