Super-prime London Rentals Soar

London is in the midst of a “super-prime rental renaissance,” buoyed by strong demand from both domestic and American tenants, Abode2 confirms.

Upper-end rents in the capital are expected to rise by a total 18.3% by the end of 2026. But most of that increase has already happened: Rental growth hit +13.5% in the year to June 2022, according to Savills’ index – the highest annual rate in over 20 years. The firm expects a slight dip to +12% by the end of the year, before a sharp drop-off sees the pace of growth slow to just 1% through 2023.

The current run of price growth is being driven by an “acute” lack of stock combined with strong demand from tenants. Families are returning to London after moving to the home counties during the pandemic, while there’s been a notable pick-up in US families relocating to London, particularly from Californian cities including Los Angeles.

Stock shortages are, however, thwarting a lot of market activity. The number of new lets recorded by LonRes has plunged by 45% in the last year, leading to the lowest number of properties let in the month of July since 2005, when the platform’s records began. Savills had 35% fewer prime rental listings in London in June this year compared to June 2019; new tenant applicants (demand) jumped up 71% in the same period.