London private residential rents returned to pre-pandemic levels at the end of last month, according to exclusive data provided by Colliers International.
At the end of October, the average residential rent in London for one- and two-bedroom flats was £566 – the highest weekly rental level since December 2019.
“The end of October witnessed a significant milestone in the London property world, with private residential rental prices climbing back to their pre-pandemic peak,” says Lee Layton, director in Colliers’ research and economics team.
“The very same high levels of transiency in the capital that caused rental falls during the height of the pandemic have led to its rapid recovery in prices, and moving forward, the combining four-fold factors of real wage growth, a net outflow of buy-to-let landlords [reducing supply], the continued return of generally younger workers and the return of overseas students this quarter will create significant momentum going into the latter part of the year.”
During the pandemic, rental values in the capital fell by 12% on the levels recorded in March 2020. The low point was July 2020, when rents fell to £477.
Rents in London are currently rising rapidly, with Colliers’ data recording a 21% increase in the last seven months.
“Residential house prices grew quickly and unexpectedly during the pandemic, driven by high demand, [the] stamp-duty cut and low interest rates,” says Andrew White, head of residential at Colliers.
“The rental market is a true indicator of the real housing economy, reflecting salaries and employment confidence. The return of rental growth is a welcome sign and shows the resilience of the UK economy and housing market.”