London exodus reverses as rental demand climbs in Q1

With tenants returning to the capital in 2022, research by rental portal Rentd has revealed that the London rental market has seen a quarterly increase in rental demand in the first quarter of the year.

The study determined the hottest spots of the London rental market based on the proportion of total rental stock currently available on the market that has already been snapped up by tenants.

Demand returns to the capital

London’s rental demand currently sits at 42%, climbing 4% from Q4 2021 as the previous exodus of the capital’s renters continues to shift.

Waltham Forest has seen the largest increase in tenant demand, up 16% during the first three months of the year, with Redbridge (12%), Barking and Dagenham (11%), Havering (11%) and Hounslow (11%) also seeing some of the strongest uplifts. 

In fact, just eight boroughs have seen a decline in rental demand since the end of last year, with the majority found within the prime London market.

Merton has seen the largest quarterly decline of 12%, with Tower Hamlets (-4%), Islington (-3%), Southwark (-2%) Kensington and Chelsea (-2%), Kingston (-2%), Westminster (-1%) and Camden (-1%) also witnessing a decline.

Where are the rental market hotspots?

Bexley, Waltham Forest and Bromley rank top for current rental demand, where 60% of all rental properties have already been snapped up during the first quarter of this year.

Havering and Sutton have also proved popular amongst the capital’s returning tenants with demand at 56% and 55% respectively. 

Kensington and Chelsea and Westminster are currently the least in demand areas of the London rental market, with demand at just 15%.

Rentd founder and chief executive officer, Ahmed Gamal, comments: “The London rental market has been particularly hard hit during the pandemic and with a lack of both foreign and professional tenant demand, landlords have had to slash their rental price expectations simply to avoid long void periods with no income at all.”

“This has led to surges in demand over the last year as tenants have looked to take advantage of these much lower rental values but the London rental landscape has been unsettled, to say the least.”

Gamal says despite this, 2022 has brought a ‘rejuvenated’ level of certainty to the market, bolstered by a return to the workplace and an uplift in rental demand for London properties.

“As a result, we’re seeing rental values return, and exceed, pre-pandemic levels in many parts of the market and this will be very welcome news for the capital’s landlords,” he concludes.