Average rental prices in London commuter hotspots are back to outperforming the rural areas that stole the show during the pandemic.
Over the last 12 months, the capital's rental price growth has recovered well from the mass city exodus that Covid created. Now the lockdowns have ended, people are returning to cities in their droves, to the extent that London rental values realised their greatest quarterly growth in over a decade, with rental prices up +6.6 per cent on the year.
Last quarter sees renters return to London
In response to the gradual easing of lockdowns and restrictions during 2021, the year closed on a high for London's rental market.
Tenants who sought out relaxing, spacious rural locations in which to see out the lockdowns began returning as the city reopened its doors, its businesses, and its lifestyle drawcards of entertainment and connectivity.
This shift caused rental recovery for the city and its commuter-belt neighbourhoods. It was also further bolstered by the return of international business and students, as they repositioned themselves back into the heart of study and commerce.
Landlords continue to maximise investment returns with Airbnb
The trend of Airbnbing in London and beyond is also on an upward trajectory with no signs of slowing in sight.
AirDNA Marketminder statistics report that there are currently 32,203 active London rentals, achieving an average daily rate of £150. As a result, many landlords have been making the switch to Airbnbing between tenancy agreements to maximise their investment returns.
Using short-stay rental services is an excellent way of bridging the gap between tenancies, allowing landlords to not only increase their overall revenue, but allow them some flexibility when it comes to holding off for the right tenant. Re-letting a property in haste to avoid rental income voids can be a costly mistake to make if the new tenants turn out to be poorly vetted or unreliable.
Busy landlords also need not worry about managing these short-term rentals themselves. Management services, such as Portico Host, provide a variety of options from basic assistance through to comprehensive packages that essentially run the venture on the landlord's behalf.
Related: Landlords' Self-Assessment Tax Returns: Advice
Forecast for London rental market in 2022
The forecast for London's rental market moving forward is somewhat unclear, as the renewed sense of uncertainty brought about by the latest Covid variant could disrupt the current trajectory. Nevertheless, a continued imbalance between supply and demand could see rental price growth persist during 2022.
Even if the latest Omicron outbreak causes market disruption, the current trend and data over the past two years demonstrate how rapidly urban markets recover. As a result, any unforeseeable interruptions to London's rental market growth in the coming year should be relatively temporary.
Advice for renters
With rental prices increasing and international students returning, finding an affordable rental in London is becoming trickier once again. Ultimately, the best advice for renters is to work hard at maintaining a desirable status as a tenant. Keep your rental history clean and clear of any discrepancy, and make sure to keep your finances in check when it comes to affordability criteria. Move quickly on new listings, and proactively make contact with agents in the areas you favour.
Despite the growth and demand making it somewhat harder for renters, there are still attractive options for reliable tenants. Check out our currently available rental properties here.
We also did a deep dive into London's most affordable rental boroughs mid last year, giving renters a valuable snapshot of the best areas to focus their attention on.
Home-hunters and sellers are back in the market too, with Rightmove reporting busiest festive season - ever!
According to recent data from Rightmove, the recent Christmas period was an extremely busy one for house-hunters too, signalling a significant trend in New Year's resolutions being to move .
As reported by the platform, Rightmove recorded its busiest ever festive period regarding UK home-hunter activity, with buyer demand up by 23% when compared to the same period in 2020.
The number of new sellers to the market had also increased by 21% year-on-year on Boxing Day, with many taking advantage of the anticipated post-Christmas surge in buyer activity. This was the highest number of new sellers to list on Boxing Day that Rightmove has ever recorded.
Prospective sellers also leaped into action on 30th December, resulting in the busiest day for real estate agent visit requests and home valuations since May 2021; activity so high that it made the top ten busiest ever days for Rightmove valuation requests.
Related: 18 First-Time Buyer Property Picks For 500k Or Less
Related: A Guide To The First Homes Scheme
London house prices bouncing back strong
The average cost of a property in London has also been recovering, with figures increasing since autumn as the rest of the country's markets slowed in response to the Stamp Duty holiday ending.
According to recent data from the Land Registry, the average cost of a London home rose by 1.9% in October 2021 to £516,285 - a figure also up by 6.2% year-on-year.
The most significant London property increases in the past year included Redbridge, Richmond, Hammersmith & Fulham, all of which rose by more than 12%.
Read More: Where To Buy In London In 2022
Read More: Living in Ilford: Local Guide and Property Market
Thinking of renting, investing, or selling in London?
If you are considering buying, selling, or renting in London, get in touch with us here at Portico and see how we can help you. You can contact us on 020 7099 4000 or call into one of our 15 London-based branches.
Or, if you are a landlord in London or considering becoming one, check out our property management services for more information on the packages we offer.
You can also visit our online property valuation tools for instant sales, rental, or Airbnb valuations.