Savills has released data on the UK rental markets that shows West London with some of the highest growth over the last year.
Southwest London comes in at 6.4 per cent annual growth and 23 per cent since March 2020 before the pandemic. Growth for the last quarter was 1.3 per cent.
“More stock coming to the market, against steadying demand, is causing the regional rental market to fall back into a seasonal pattern, with rental values starting to simmer over the past three months. But it still leaves prime rents outside of the capital a significant 22.7 per cent above where they were at the start of the pandemic,” comments Jessica Tomlinson, research analyst at Savills.
As a result, the gap between landlords’ and tenants expectations in these regional markets has widened. Our regional agents reported a third of tenants now expect to pay up to five per cent less for their rental home, vs just 18 per cent of landlords. While in London, more than half of landlords are still expecting 5-10 per cent rental increases, whereas a third of tenants only expect to pay up to five per cent more.”
“Rental growth in regional cities and central London locations comes as markets continue to rebalance away from leafy green locations synonymous with larger property that were most popular during the pandemic, back towards urban dwellings with good proximity to transport and employment hubs,” continues Jessica Tomlinson.
“This, in part, has caused flats to outperform houses in the quarter, both in London (2.0 per cent vs 1.3 per cent) and across regional rental markets (2.6 per cent vs 0.0 per cent). Strong competition from needs-based tenants combined with successive rises to interest rates have kept some would-be first-time buyers in the rental market, pushing up prices of smaller properties.”
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