In detail, JLL says average rents across London have risen 12.5 per cent over the past year. This has been underpinned by several factors, although the main contributor is a significant shortage of available rental stock on the market.
Across the Crossrail line, average rents have risen 13.3 per cent over the past year, with Twyford, Woolwich and Southall seeing the largest increases in rents.
New Crossrail transport improvements mean that the average journey time from Twyford to Bond Street has reduced from 1 hour 6 minutes to 48 minutes, saving 18 minutes. However, Twyford is an outlier compared to neighbouring stations on the western end of the line.
With the exception of Twyford, average annual rental growth of south eastern stations is 9.6 per cent (Reading to Hanwell).
Historically, areas to the north and west of London have been better connected into central London than the east. Generally, JLL has seen that greater rental premiums in areas of the line which have seen the greatest reductions in journey times.
Journeys from Woolwich, previously one of London’s most poorly connected areas, has seen travel times to Liverpool Street halved to 15 minutes, whilst journeys from Woolwich to Whitechapel will be reduce by almost 20 minutes. Comparatively, Woolwich has seen annual rental growth of 26.2 per cent.
Some 56 per cent of areas surrounding Crossrail stations have outperformed their regional average.
“Before the Crossrail stations were opened in May 2022, we saw spikes in property prices during periods of the planning and construction process, as investors bought early in an attempt to benefit from price premiums” says Meg Eglington, Senior Analyst at JLL. “By the time of completion, most of the growth had been priced in, and instead we begin to see sharp increases in rental values. Now the line is open, renters, who don’t have a financial stake in the area, are willing to pay a premium as they can immediately benefit from improved transport connections”.
In JLL’s latest tenant survey 92 per cent of tenants said the proximity to public transport was either very important or important to them, with 67 per cent willing to pay a rental premium to be close to transport links. Historically, North and West London have been better connected than the East, so recent transport improvements in East London have significantly increased the appeal of the area over recent years.
Taking a look at renter demographics, the average age of a renter in London is 31.
East London typically boasts a younger age demographic, and in recent years JLL has seen a migration of professionals from West to East London, to access improved affordability. Tower Hamlets is the youngest borough in London, with a median age of 30.
Analysis of JLL letting data highlights over 90 per cent of those renting with the agency in East London are Millennials and Gen Z.
Now the area is better connected, it is likely that demand for rental properties, particularly from young professionals, will continue to rise.
There is further potential that areas located towards the end of the line will see an increase in interest from first time buyers. For those weighing up affordability and location, locations sightly further out but with a quick commute, are beginning to look like an attractive option.