The London rental demand in Q1 2022 has remained really high, standing at 42%, an increase of 4% compared to Q4 2021, as the previous exodus of London renters continues to reverse. Average rents in the capital have increased by 14.3% compared to a year ago and by 2.4% compared to Q4 2021. The imbalance between supply and demand is set to go on until more choice comes onto the market for tenants.
LONDON RENTAL DEMAND
Rental demand is calculated by looking at the number of rental properties available on the market and how long they have been on the market. If a property stays available to let on the market for a long time, there may be something wrong with that property or it might be an indication that the area has too much supply and not enough demand.
Only eight London boroughs have experienced a decline in rental demand since the end of 2021, the majority belonging to the prime central London market.
- Camden: -1%
- Westminster: -1%
- Kensington & Chelsea: -2%
- Islington: -3%
- Tower Hamlet: -4%
Kensington & Chelsea and Westminster were the London boroughs the least in demand in Q1 2022 with demand at just 15%.
|BOROUGH||DEMAND Q1 2022||QUARTERLY CHANGE||ANNUAL CHANGE|
|City of London||27%||+6%||-7%|
|Kensington & Chelsea||15%||-2%||-1%|
LONDON AVERAGE RENTS
London average rents have increased by 14.3% compared to a year ago and stand at £2,193. This is 2.4% higher compared to Q4 2021 and 5.20% higher than 2 years ago at the start of the pandemic.
|QUARTERLY CHANGE||ANNUAL CHANGE|
London rental properties supply is still very low despite a small increase compared to Q4 2021. Competition between prospective tenants is intense and many tenants have to pay more than the initial asking rent in order to secure properties. Higher rents, inflation and high energy prices prevent many tenants leaving their current home and this further limits the number of properties available to rent on the market. There is only so much tenants can afford and it is expected that the market will cool down later this year.
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