London Rental Recovery: demand picks up at last in the capital

One of the most pessimistic lettings operations about the London market during the pandemic says that at last the capital is showing signs of recovery.

Spareroom says that it is starting to see interest pick back up in the capital, with demand against supply up 71 per cent year on year across London. 

While West Central London may have seen the biggest regional drops in rent, it also experienced the biggest increase in demand against supply - up 191 per cent year on year - followed by East Central and South West London. 

Even so, rents remain down in the capital.

West Central and West London saw the biggest drops in room rents across the city, both down four per cent when comparing Q2 2021 with Q2 2020. 

This is closely followed by East Central, North and South West, all down three per cent. 

The biggest localised drops were in Chelsea (SW3) down 15 per cent, Earls Court/West Brompton (SW5) down 11 per cent and Dulwich (SE21), also down 11 per cent.  

Meanwhile Balham (SW12), Winchmore Hill (N21) and Upper Edmonton (N18) saw the biggest increases, up seven, six and five per cent respectively. 

This negative trend in the capital continues to pull down national room rents, but when excluded from the rest of the UK, average rents across the country are actually up one per cent, says Spareroom. 

Matt Hutchinson, SpareRoom director, comments: “Our latest data shows rents in London falling year on year yet again, a trend that began with the start of the pandemic and has persisted ever since as people looked beyond life in the capital. 

“However, unlike the same quarter last year, we’re now seeing demand for London rooms rentals outpacing supply. As more and more of us are vaccinated and industries like entertainment and the arts slowly starting to re-open, we can expect more people to return to our cities. That may mean the trend in negative rents begins to flatten and perhaps even reverse over the coming months."