Rental values in London and the Home Counties have climbed to five per cent above their pre-pandemic level in March 2020, new figures from Knight Frank show.
The annual change in prime central London reached 19.8 per cent in January, which was the largest jump since the index began in 1995. Meanwhile in prime outer London, the change was 16.6 per cent, the biggest increase over the same period.
These increases are a result of a readjustment to both indices to reflect the steep nature of the rises that took place last year.
On the positive side, the fall in rental values that was experienced in the year to March 2021, caused by a flood of short-let properties hitting the market and demand having dried up, has now reversed as lockdown restrictions have eased.
“The unprecedented backdrop of the pandemic led to exceptional rental value growth last year” says Tom Bill, head of UK residential research at Knight Frank. “It has tailed off in recent months as the supply and demand imbalance corrects itself but that process still has some way left to run, which will keep upwards pressure on rents this year.”
And Gary Hall, head of lettings at Knight Frank, adds “It’s a tough time to be a tenant at the moment, rents are rising and the availability of stock is low, which means transaction volumes are lower, that said, we believe stock levels should start to improve later this year.”