The prime London rental market has enjoyed an 8% uplift in rental values over the last year, with the most in-demand areas seeing a jump of as much as 29%, according to research by Bective.
Its analysis of LonRes data reveals that despite a tough period for the London property market, the capital’s prime neighbourhoods have found their feet over the last 12 months, with all but four demonstrating upward growth in the average rent achieved.
On average, monthly rental values across these high-end neighbourhoods now sits at £1,078 per week – up 8% from £998 per week just a year ago.
Bayswater and Maida Vale has seen the biggest increase. At £1,205 per week, rental values are now 29% higher per week than this time last year.
The area of Kings Cross and Islington has enjoyed a 24% increase with Fitzrovia, Bloomsbury and Soho also seeing an increase of 20%.
Seven other areas have enjoyed double-digit rental growth including Fulham and Earls Court (17%), Hampstead (15%), Hammersmith & Brook Green, Chiswick, North Kensington (14%), Knightsbridge & Belgravia (11%), Chelsea (11%), Richmond, Kew & Sheen (10%) and St John's Wood, Regents Park & Camden (10%).
In contrast, rental values in Marylebone have fallen 13% since this time last year, with the Midtown, City & City Fringe area (-4%) and South Kensington (-3%) also seeing a decline while rental values in Kensington, Notting Hill & Holland Park have remained flat.
At £2,157 per week, Knightsbridge and Belgravia remains the most prestigious pocket of the prime London rental market in terms of the outright cost of renting, followed by Mayfair and St. James’s (£2,123) – the only other area where weekly rental values exceed the £2,000 threshold.
Canary Wharf and the Docklands is the most affordable pocket of the prime rental market with the average weekly rent averaging just £496.
Tom Dainty, Bective head of lettings and property management, comments: “2021 has been a good year for the prime rental market, all things considered. Typically renting within the prime market is driven by lifestyle rather than necessity, such as work for example. So the market hasn’t suffered to the same extent from the exodus of London professionals looking outside the capital for cheaper rents while working at home.”
“At the same time, we’ve seen an uplift in demand as travel restrictions have eased and foreign interest has returned to the London market. In many cases, those with a long term view of homeownership are choosing to try before they buy via the rental market to ensure a particular neighbourhood is right for them before committing to a purchase.”
As a result, Dainty says larger family houses have been renting at exceptional speeds and a real shortage of suitable stock has seen eager tenants offer above and beyond asking rents to secure them.
“This has been the predominant factor behind the sustained health of the prime rental market, although we are now seeing enquiries for apartments start to climb once again,” he adds.