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London rental market ‘in full swing’ as rents rise and stock levels drop

The property market has suffered greatly as a result of the pandemic, and the rental market, even more so.

Dwindling demand due to a combination of working from home guidelines and travel restrictions preventing overseas interest caused housing stock to flood the market and rental prices to drop, as landlords looked to secure a tenant and recover at least part of their rental income.

However, the latest property market snapshot by London lettings and estate agent, Benham and Reeves, has revealed that the tide has now turned and the London rental market is making a swift return.


In January 2020, the average London rent sat at £1,627 per month but during the height of the pandemic, this plunged by 4.4% to £1,556 in December.

The latest data for July shows that London rental values have bounced back – up 2.4% in the last month alone – and are now 5.7% higher than their December 2020 low.

The agency says this is a clear indicator that demand is returning to the capital’s rental market and additional research further cements this.

In Q4 of 2019 prior to the pandemic, there were some 47,000 rental properties listed to rent across the capital. But as demand fell and tenants vacated during the pandemic, this climbed to over 100,000 rental properties by Q3 of 2020 and remained above this landmark threshold for three consecutive quarters.

Despite this, the latest analysis by Benham and Reeves shows that to date, this figure has fallen to 64,206 and while it is yet to drop to pre-pandemic levels, it provides another strong indicator that the London rental market is bouncing back as tenants return to the capital.

Marc von Grundherr, director of Benham and Reeves, comments: “It’s been a tough year or so for the London rental market which has arguably been the worst hit in terms of dwindling demand and plummeting rental values.”

“That said, we can finally say with confidence that we’ve seen the bottom and a number of factors are now spurring a market-wide recovery.”

He adds: “We saw virtually no demand from overseas students last year which meant this stock further flooded a market that was already saturated due to a lack of interest from working professionals.”

“Although widespread lockdown restrictions remained in place during the start of this year, the reversal of the working from home trend and the return of foreign student demand, in particular, are currently driving a London rental resurgence during the second and third quarters.”

The table below shows the total level of rental stock listed to let during the pandemic:


Total Rental Stock Listed

Quarterly Change (%)

Point Change (%)

Q4, 2019




Q1, 2020



Q2, 2020



Q3, 2020



Market Bottom

Q4, 2020




Q1, 2021



Q2, 2021



Q3, 2021 (To date)



Data sourced from Rightmove


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