Rents in and around London increased throughout Q1 and Q2 and are now noticeably higher than pre-pandemic levels. As demand outstrips supply, rents bounced back at historic rates since their pandemic low point in Q1 2021.
With the number of corporate relocations on the rise and the arrival of international students mingling with domestic demand, rents are forecast to continue increasing at a steady rate into next year. Prime central London rents are seeing bigger increases than prime outer areas as the race for space has slowed.
According to John Humphris, Head of Relocation and Corporate Services at Knight Frank, “The volume of searches has been steadily increasing and is expected to continue into the summer, and we can expect bidding wars because of the surge in demand. It is advised that corporate tenants coming to London arrive with robust allowances and they should be quick off the mark when deciding on a property.”
There are some indications that a slowdown is on the horizon. Tom Bill, Head of UK Residential Research at Knight Frank, said “Prime rental supply is still low but is on the increase as the sales market could be close to peaking with high supply and high demand.” The ‘accidental Landlord’ scenarios are increasing as higher achievable rents with good tenants are becoming harder to turn down. Tom added, “The ‘great resignation’ in London has been noticeable. A higher churn of tenants has been apparent as some workers have moved on from London/UK.”
AIRINC conducts in-depth housing research and analysis in London, with multiple variants and market sectors covered. Please contact your AIRINC representative to discuss which products and options work best for you and your organization when sending assignees to London.