Central London rents are now 7.5 per cent higher than pre-pandemic levels.
A detailed analysis of just 100 properties by property consultancy JLL focussed on the areas of Battersea/Nine Elms, Canary Wharf, Kensington, Stratford and the City of London – each property had let pre-pandemic, during Covid-19 and more recently as the pandemic eases.
The homes show an average 3.6 per cent fall in rental values across the five markets from pre-pandemic levels to the lowest point during the depth of Covid.
Subsequently, all markets have demonstrated a strong bounce back, with growth since pre-pandemic to current levels averaging 7.5 per cent and extending up to 8.8 per cent.
“After an initial difficult period for London’s residential rental market in early 2020, our research shows the recovery is showing a strong bounce back in London’s core markets, even exceeding pre-pandemic levels. This is in part due to the UK’s vaccination programme which has allowed local economies to re-open” says JLL senior research analyst Meg Eglington.
“Looking ahead to the next 12 to 24 months, international renters are likely to be most influential for market performance.”
And Charlotte Russell, a JLL area director, adds: “Some homes in some parts of London were hit by greater rental declines and bounce backs of -20/+20 per cent at points throughout the pandemic. Declines were typically driven by government restrictions and uncertainty.
“Now, the shortage of supply is further pushing rental values to levels higher than those seen pre-pandemic, in some cases as high as 50 per cent.
“We have never seen such a shortage of available rental properties across central London, which will continue to be an ongoing issue throughout 2022. Void periods are low, and properties are typically let within three to seven days, with increased rents”.
JLL forecasts strong rental growth during 2022 of 4.0 per cent across Greater London, whilst Prime Central London is forecasted to rents rise by 6.0 per cent.
This will be driven largely by an anticipated return in travel from the world’s high net worth individuals, coupled with a severe lack of supply of rental homes.