Rents in prime areas of London are nine per cent higher today than before the pandemic according to Knight Frank.
The high end agency says the number of market valuation appraisals it gave was actually 40 per cent below the five-year average in April, indicating the shortage of stock, while the number of new prospective tenants registering was 57 per cent higher over the same period.
This supply-demand gap is what triggered a jaw-dropping 29.2 per cent annual rise in rental values in prime central London in April, with prime outer London up 23.5 per cent.
Gary Hall, head of lettings at Knight Frank, says: “The supply squeeze is only going to get worse over the summer. We will continue to see competitive bidding and supply will only improve when the sales market slows down and more owners decide to let out their property.”
As a result of this dramatic rent rise, landlords are returning to the market says the agency.
Andrew Groocock, regional head of sales for Knight Frank’s City, East and North region in London, adds: “The extent of the recent rent rises has started to compensate for some of the regulatory changes of the last few years. It’s increasingly driving activity in London’s apartment market.”
Knight Frank forecasts a further 17.1 per cent rent increase across the whole UK over the next five years, with London over-performing - prime central forecast to be up 22.7 per cent and prime outer up 19.3 per cent.
Allied to all of this, international relocation enquiries - which of course plummeted during the pandemic - are now on the rise, at a higher level than at any time for almost three years.
John Humphris, head of relocation and corporate services at Knight Frank, says: “Demand is hard to satisfy at the moment and it will only grow as summer approaches. If you own a good property at the moment, the chances are that it will be let before it even comes to the market.”