LET
SOLD
Record rental growth in London is being
driven by a supply/demand imbalance and
fuelled by a myriad of factors. Here we
examine the dynamics.
The London rental market took a hit
during the pandemic but has rebounded
strongly.
Influx of renters
In 2020, Covid caused a sharp decline in
rental applicants, as renters left London
for other parts of the United Kingdom.
Fast forward to the first half of 2022 and
there is a stark reversal: for every 10
renters leaving the capital, 14 are arriving
from elsewhere in the UK.
Overseas renters are also returning. 8.3%
of new tenants in the first half of 2022
were from overseas, up from 5.1% in the
same period of 2021 and 8% in the first
half of 2019. This is expected to increase
as overseas students arrive during the
traditionally busiest third quarter.
Smaller households
Changing requirements, including hybrid
working and need for individual space have
led to an increase in smaller households.
So far in 2022, 46% of Foxtons lets have
been studios and 1-bed flats, compared
with 41% in the same period in 2019.
Strong sales market
Competition in the sales market is driving
some buyers to temporarily rent in order
to put themselves in a more favourable
position to move quickly on a purchase.
In the first half of 2022, 8.1% of renters
beginning new tenancies moved from
owner occupation, the highest level in 7 years.
Rents rise
These demand factors, together with
supply pressure, have culminated in
record rents. Average rents for new
tenancies have risen by 25% since
H1 2021 reaching record highs.
DEMAND
SUPPLY
DEMAND
2 London Lettings Report Summer 2022 | Extraordinary times
RISE IN
RENEWALS
INFLUX OF
UK RENTERS
OVERSEAS
RENTERS
RETURN
EXITING
LANDLORDS
SMALLER
HOUSEHOLDS
EXTRAORDINARY
TIMES
OR A NEW NORMAL?
6.2% INCREASE
14 NEW ARRIVALS
FOR EVERY 10
LEAVING LONDON
8.3% OF NEW
TENANTS
ARE FROM
OVERSEAS
22% REDUCING
OR SELLING
THEIR PORTFOLIOS
46% OF LETS
ARE STUDIOS AND
1-BED FLATS
2.0
1.0
0 H1
20
H1
22
H2
20
H1
21
H2
21
RATIO OF MOVES INTO AND OUT OF LONDON
Dataloft Rental Market Analytics (DRMA)
DRMA
DRMA
Foxtons
Foxtons
English Private Landlords Survey