Huge 22.5 per cent rent rise in prime London, says Lo...

Rents in prime areas of London are rocketing at an annual level of 22.5 per cent according to LonRes.

Despite the falls recorded when the pandemic hit, average rents - buoyed by the return of people to work and students to study - have recovered to above their pre-pandemic levels across central London.

The recovery has been strongest in Prime Central London with rents now 6.7 per cent higher than their 2019/20 peak while in Prime Fringe London they are 1.6 per cent higher.

Just 14 per cent of new lets in January this year required a price reduction, a massive fall from the 51 per cent figure recorded in January 2021.

Anthony Payne, managing director of LonRes, says: “Lack of stock both for rentals and sales, continues to dog the prime London housing market. And in a high demand, low supply environment, it follows that prices inevitably rise.

“In the case of the rental market, stock levels are currently 67 per cent lower than they were in January last year and prices 22.5 per cent higher.

“This is a complete turnaround in fortunes for a sector that was particularly hard hit when the pandemic began. Back then rents fell as fast as stock levels rose. Almost two years on and the lettings market has effectively covered the ground lost during the pandemic. Today rents are some five to six per cent higher than in the months preceding that first lockdown.

“But this has also meant less bargaining power for tenants returning to work or study. Just 14 per cent of new lets in January were subject to a price reduction.

“Unusually - sales and lettings tend to follow opposing paths - it’s an all too similar tale in the prime London sales market.”