For the first time since January 2020, rents in Inner London rose on an annual basis – they were up 3.9 per cent in November when compared to the same time last year, says lettings agency Hamptons.
The resumption of office life and global travel has meant that for the first time since January 2020, rents in Inner London have returned to growth. In November, rents in London’s 13 Inner boroughs rose 3.9 per cent when compared to the same month last year, rising to average £2,329 pcm, up from -0.1 per cent in October.
Since the start of the pandemic rents in Inner London have been falling. They bottomed out in April 2021 when they were down a huge 22.1 per cent annually.
Last month, Inner London’s rental market was boosted by a 14 per cent annual rise in the number of applicants looking to rent. However, there were 71 per cent fewer homes to rent than in November 2020.
Last year the rental market was flooded with short-let properties that had been bought onto the long-term rental market at the start of the pandemic.
November also marked the first time in 20 months that the rate of Inner London rental growth caught up with Outer London where rents have been rising for the last 15 months.
A change in working patterns since the pandemic began has driven tenants to seek more space, boosting rents in the suburbs, while suppressing demand for inner-city living.
Hamptons’ estimate that the pandemic has cost Inner London landlords £2.9bn in lost rent over the last 22 months.
Despite positive annual growth, it still costs less to rent a home in Inner London than it did on the eve of the pandemic. The average home in Inner London cost 11.6 per cent or £305 pcm less than it did in January 2020.
While Inner London is the only region where rents are lower today than they were in January 2020, they are picking up pace. Hamptons expects Inner London rents to recover to pre-pandemic times by the middle of next year.
A slow start to Inner London’s recovery has meant that rents outside the capital have risen nearly three times faster than those in London since the pandemic began. Across Greater London, rents have risen 5.9 per cent since January 2020, but outside London rents have increased 16.1 per cent.