The latest property market analysis by London lettings and estate agent, Benham and Reeves, has revealed that rental values across the capital have not only bounced back versus the pandemic dip experienced in 2020, but have also breached pre-pandemic levels in all but three areas.
The research shows that between 2019 and the initial pandemic year of 2020, the average London rent fell by -3.4%.
The impact was far greater across many parts of the London market, with Camden seeing rental values plummet -20.7% in a year, while the City of London was also one of the hardest hit with a -12.6% reduction.
However, as London has slowly returned to business in 2021, tenant demand has also returned and current rental values now sit 9.4% higher than they did during 2020.
The pandemic continues to have an influence, with London’s more peripheral boroughs still seeing the strongest performance. Rents are up 20.1% year on year in Kingston, with Bexley (18.3%), Newham (15%), Croydon (14.1%) and Hillingdon (13.6%) also amongst the largest increases.
The City of London remains the only area yet to recover, with rental values still down -11.4% annually.
While a bounce back from pandemic decline is encouraging, the real positivity lies within the fact that the average London rent is now 5.7% higher than it was in 2019, prior to the market slowdown.
In fact, just the City of London (-22.5%), Camden (-18.9%) and Westminster (-4.6%) are yet to see rental market values return to pre-pandemic levels.
Benham and Reeves also noted that the volume of properties they are seeing let to tenants is up 67% year on year and 22.7% versus pre-pandemic levels, while landlords are now securing re-let rental prices some 10% to 20% higher than they were prior to the COVID-19 outbreak.
With a further revival now coming in the form of foreign tenant demand, the outlook is extremely positive for 2022 and Benham and Reeves believes this confidence in the market will bring a further 5.5% increase to rental values in addition to the market bounce-back already witnessed in 2021.
Director of Benham and Reeves, Marc von Grundherr, commented:
“The London rental market has arguably been the worst hit as a result of the pandemic and we’re unlikely to see a period of such unexpected uncertainty again in our lifetime. Demand for rental homes evaporate almost overnight during the pandemic causing a surplus of stock on the market while rental prices plummeted.
But the London market is nothing but resilient and when the tide starts to turn, it turns very quickly indeed. We’ve seen house prices in the capital enjoy the largest monthly bounce of all regions in a single month having trailed the rest of the nation for almost two years and the same revival is also apparent across the rental market.
Demand is lifting and rental values have not only recovered, but they’ve also exceeded levels seen prior to the pandemic. Even better still, we’re seeing further positivity in the trenches and this current market activity is yet to materialise at a top line level where market statistics are concerned.
As a result, we can say with confidence that the London rental market decline is now firmly behind us and so any lower confidence forecasts of further price reductions can now be disregarded with yet further positive growth forecast for 2022.”
Table shows current London rental market values and how they have changed when compared to the pandemic and prior to it, sorted by largest change vs pre-pandemic levels
Location
Average monthly rent (2019)
< Change – 2019 to 2020 >
Average monthly rent (2020)
< Change – 2020 to 2021 >
Average monthly rent (latest 2021)
Change pre-pandemic (2019) to now (2021)
Newham
ÂŁ1,424
3.7%
ÂŁ1,476
15.0%
ÂŁ1,697
19.2%
Bexley
ÂŁ1,106
0.6%
ÂŁ1,113
18.3%
ÂŁ1,317
19.1%
Merton
ÂŁ1,530
7.1%
ÂŁ1,639
9.2%
ÂŁ1,790
17.0%
Ealing
ÂŁ1,463
7.2%
ÂŁ1,568
8.8%
ÂŁ1,706
16.6%
Croydon
ÂŁ1,136
1.7%
ÂŁ1,155
14.1%
ÂŁ1,318
16.0%
Southwark
ÂŁ1,654
4.0%
ÂŁ1,720
10.8%
ÂŁ1,906
15.2%
Barking and Dagenham
ÂŁ1,194
1.0%
ÂŁ1,206
12.3%
ÂŁ1,355
13.5%
Havering
ÂŁ1,169
0.5%
ÂŁ1,175
12.7%
ÂŁ1,324
13.2%
Wandsworth
ÂŁ1,883
3.5%
ÂŁ1,948
9.0%
ÂŁ2,124
12.8%
Lambeth
ÂŁ1,754
11.8%
ÂŁ1,961
0.8%
ÂŁ1,976
12.6%
Haringey
ÂŁ1,558
5.5%
ÂŁ1,644
6.7%
ÂŁ1,755
12.6%
Waltham Forest
ÂŁ1,309
3.8%
ÂŁ1,359
7.9%
ÂŁ1,466
12.0%
Enfield
ÂŁ1,310
-0.7%
ÂŁ1,301
12.7%
ÂŁ1,466
11.9%
Greenwich
ÂŁ1,404
6.4%
ÂŁ1,494
5.2%
ÂŁ1,571
11.9%
Kingston upon Thames
ÂŁ1,390
-7.3%
ÂŁ1,288
20.1%
ÂŁ1,547
11.3%
Harrow
ÂŁ1,407
2.7%
ÂŁ1,445
8.4%
ÂŁ1,566
11.3%
Hillingdon
ÂŁ1,270
-2.0%
ÂŁ1,244
13.6%
ÂŁ1,413
11.3%
Bromley
ÂŁ1,321
-0.2%
ÂŁ1,318
11.2%
ÂŁ1,465
10.9%
Redbridge
ÂŁ1,318
-0.5%
ÂŁ1,311
10.4%
ÂŁ1,448
9.8%
Lewisham
ÂŁ1,324
-0.2%
ÂŁ1,322
9.7%
ÂŁ1,451
9.6%
Richmond upon Thames
ÂŁ1,857
4.5%
ÂŁ1,940
4.6%
ÂŁ2,030
9.3%
Hackney
ÂŁ1,834
1.4%
ÂŁ1,860
6.9%
ÂŁ1,989
8.5%
Sutton
ÂŁ1,167
-2.9%
ÂŁ1,133
11.5%
ÂŁ1,263
8.2%
Hounslow
ÂŁ1,432
-1.1%
ÂŁ1,416
8.6%
ÂŁ1,538
7.4%
Brent
ÂŁ1,535
-2.7%
ÂŁ1,494
8.9%
ÂŁ1,627
6.0%
Tower Hamlets
ÂŁ1,803
0.4%
ÂŁ1,810
4.9%
ÂŁ1,898
5.3%
Hammersmith and Fulham
ÂŁ2,117
-4.8%
ÂŁ2,016
10.2%
ÂŁ2,221
4.9%
Barnet
ÂŁ1,523
-2.5%
ÂŁ1,485
6.9%
ÂŁ1,587
4.2%
Islington
ÂŁ1,914
-0.3%
ÂŁ1,908
4.4%
ÂŁ1,992
4.1%
Kensington and Chelsea
ÂŁ3,053
-2.5%
ÂŁ2,977
5.7%
ÂŁ3,148
3.1%
Westminster
ÂŁ3,018
-6.5%
ÂŁ2,822
2.0%
ÂŁ2,879
-4.6%
Camden
ÂŁ2,536
-20.7%
ÂŁ2,012
2.2%
ÂŁ2,056
-18.9%
City of London
ÂŁ2,446
-12.6%
ÂŁ2,138
-11.4%
ÂŁ1,895
-22.5%
LONDON
ÂŁ1,697
-3.4%
ÂŁ1,639
9.4%
ÂŁ1,793
5.7%
Source – Benham and Reeves, the Office for National Statistics – Private Rental Market Summary, HomeLet
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About the Author
Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.