London rents surge as tenants bounce back

As a major business machines company used to say, "We don't lose customers, we just lend them to the competition for a while." So it seems with London, as the post-pandemic return of tenants pushes rents to new highs.

Homelet's rental index for April shows average national average rents for new tenancies rose by 9.5% in the last year, with London leading the way at 14.2%.

The capital's surge in rental prices has been driven by tenants returning from outside London. Analysis by Hamptons shows that so far this year, a third of new tenants were relocating from outside.

This compares with just 12% in 2020 when Covid hit the London rental market, but is also a significant jump from the pre-pandemic norm of 23%

With Covid being pushed further to the back of people’s minds, life in the capital is slowly returning to its new normal.  Tenants are returning to the bright lights of the city and this is driving rental growth to record highs. 

The rise of remote working means that fewer tenants are moving to the capital specifically for work.  In fact, a growing number of tenants choosing to live in London are working fully remotely and could live nearly anywhere in the country. 
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The footloose nature of many jobs today means that it will be culture and lifestyle rather than employment that becomes the capital’s biggest draw.

​Aneisha Beveridge, Head of Research, Hamptons

Prime Central London

According to property services giant Knight Frank, the number of rental properties coming to market has dropped by 40%, while enquiries have risen 57%, driving up prices by 29% in the year to April. Whilst prime central was the the country's biggest rental market loser during Covid, prices are now 9% above pre-pandemic levels.