Falling rents and back-to-office mood music improve London market

London’s rental market gathered momentum in June as tenants anticipated a return to the office with 24 per cent more tenancies agreed compared to May, according to lettings agency Chestertons.

Tenants were also keen to take advantage of rents which had fallen to 18-month lows but which are now starting to rise as the supply of available properties reduces. 

Some of the areas that have seen the biggest rental increase over the past three months are Greenwich (up 4.9 per cent), Kew and Knightsbridge (both up 4.7 per cent) and Battersea Rise (3.9 per cent up).

Richard Davies, head of lettings at Chestertons, says: “As UK businesses are preparing for the reopening of offices, London’s lettings market is already witnessing the return of the city worker, rushing to rent a home in close proximity to work. 

“Chestertons agreed the highest ever aggregate number of tenancies for any first half year period. Adding to the demand is the imminent return of international students and corporate tenants which, since some easing of travel restrictions, has already been evident.”

Comparing the demand from UK and international tenants in June against May, Chestertons’ lettings division registered a 29 per cent increase in applicant numbers, a 17 per cent increase in tenants moving into their new flat and a 16 per cent increase in offers on properties. 

At the same time, the number of properties available to rent in June fell by four per cent compared to May and by one-third compared to June last year. 

Areas that have seen the largest decrease in available properties to rent in June 2021 compared to June 2020 - when the market was only just out of lockdown - include Battersea & Clapham, Hyde Park, Richmond and Notting Hill.

“With the continuous increase of tenants wanting to move back to London, lower levels of supply and rents starting to increase, we expect London’s rental market to become increasingly competitive over the next few months” Davies concludes.