4:09 PM May 18, 2022
More and more tenants are moving from home counties to the capital, driving up rents in London.
According to Hamptons, a record 30% of houses let in London so far this year have been to someone who previously lived outside the capital, compared to just 12% in 2020.
A total of 55% of those arrivals arrived from Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent or Surrey, compared to a pre-Covid average of 40%.
As a result, rents have climbed 12.3% over the past year – the fastest rate since the Hamptons Rental Index began in 2013.
Two areas of Hertfordshire have been named among the 10 places tenants are most likely to leave for London in 2022, with 27% of tenants in Hertsmere and 20% of those in St Albans leaving Herts for the capital in 2022.
Work is less likely to be the motivation for tenants deciding to move to London now than it was before the pandemic, with 31% moving for work in 2022 compared to 40% in 2019.
Rents have skyrocketed across the country, with the cost of newly rented accommodation rising 9.8% over the past year; more than half of all rental growth over the past five years (18.2%) has occurred in the past 12 months.
The shortage of supply is another factor in this strong growth, with 30% fewer properties available for rent last April. London saw the third biggest fall in rental stock in Britain, down 64% behind the North West (down 76%) and Yorkshire & Humber (down 67%).
Aneisha Beveridge, head of research at Hamptons, said the current rate of rental growth in London is “mainly due to the capital catching up with the rest of the country”.
“Today the average rent in London is 103% higher than the average outside the capital,” she said. “Although this gap is up from 96% a year ago, it remains below the pre-Covid 120-130% premium which has been eroded by strong rental growth outside the capital in recent years. But the current rate of rental growth in London is likely to bring the premium closer to its pre-Covid level within two years.
Aneisha added that the return of tenants to the capital after Covid is propelling rental growth to record highs.
“The rise of remote working means that fewer tenants are traveling to the capital specifically for work. In fact, an increasing number of tenants who choose to live in London are working entirely remotely and could live almost anywhere in the country.
“The mobile nature of many jobs today means that it will be culture and lifestyle rather than employment that will become the capital’s biggest draw.”