Knight Frank is anticipating a “sprint for stock” in the lettings market as offices reopen and travel restrictions ease.
Tom Bill, Knight Frank’s head of UK residential research, said supply has been curtailed as the flow of short-let properties onto the long-let market has dried up as staycation rules have been relaxed.
In other cases, he said, would-be landlords sold to capitalise on surging demand in the sales market due to the stamp duty holiday.
Bill said increased international travel was driving up demand, as is a trend for office workers to rent a place in London having moved out for more space during the pandemic.
Bill said: “In many cases, office workers are renting a London base having moved out of the capital as part of the ‘race for space’ trend, which has also been a defining feature of the property market during the pandemic.
“Given how quickly a tenancy can be agreed compared to a sale, what’s taking place in the lettings market is more urgent and can be best described as a ‘sprint for stock’.”
Knight Frank’s research found that average rents in prime central London rose by 1.2 per cent in the three months to August, the biggest such increase since July 2018.
In prime outer London, the quarterly gain of 0.9 per cent was the largest since June 2018.