The London rental market – review of the year 2022

Rental demand in London continues to soar

The unprecedented levels of rental enquiries that characterised the first part of 2022 have continued right up until December. Business is nearly 40% up on pre-pandemic levels. With so many professional applicants looking for a rental property in the Capital, there has never been a better time for landlords to use our services to let and manage their London rental property.

Stock scarcity continues to bite

Although more New developments are being completed, housing stock shortages are still a major factor. Demand continues to exceed supply and this has led to most tenants choosing to sit tight. This creates something of vicious cycle as the London rental market relies on the mobility of its tenant base to free up rental properties for new entrants. As a result, tenancy renewals are on the rise and our lettings branches are seeing properties let almost immediately they become available.

The Capital’s professionals resume working from the office

With the novelty of working from home a distant memory, corporate tenants are resorting to short-let apartment options as a stop-gap solution to the shortage of rental properties. With rents in Kensington, Chelsea, Fulham and Hammersmith increasing by 15% over the last 12 months, this might not be such a bad tactic. In fact, because of the Covid-related delay in increases, some rents have jumped by a massive 25%, so short-let arrangements no longer seem as expensive as they once were.

Our response to the cost-of-living crisis

Our prime responsibility lies with getting the best deal for our landlord client base, but we would be short-sighted not to take the rise in the cost-of-living into account. A successful tenancy relies on the renters ability to cover their costs and a main part of our job is to ensure that their references reflect this. Over the last year, this service has proven to be robust and effective. It helps us to deal with tenants with all our usual sensitivity and tact and our landlords with trademark professionalism.

Rental demand across the City and East London

With neighbourhoods such as City and Canary Wharf experiencing a return to their 2019 levels of vibrancy, our East London branches are, once again, being kept busy throughout the year. Most enquiries involve one or two bed apartments with rentals of between £450 – £800 per week.

Among the big ticket developments that have caught the imagination this year, are Postmark London in Farringdon, One Blackfriars (SE1), One Bishopsgate Plaza (EC3) and Principal Tower (EC2) as well as One Park Drive and London City Island in Canary Wharf. Merino Wharf and Cashmere Wharf in London Dock Wapping are also much sought after and our on-site branch means that we can act quickly on our clients’ behalf.

Enquiries increase from tech and fintech professionals

London’s fast expanding Fintech industry continues to be revitalised by an influx of Indian nationals, keen to make their mark on the global stage. These highly-skilled professionals require quality accommodation on the fringes of the Square Mile and their resources are currently underpinning a strong rental market in these districts.

Zones 1 and 2 return to prominence

Zones 1 and 2 have traditionally been the favourites of corporate tenants, particularly the areas around Kensington, Knightsbridge and around Hyde Park. Scarcity of housing stock has been a crucial driver of high rents. One way around this is for prospective tenants to offer rent payments of between 6 or 12 months in advance. Together with making an initial offer for above the asking rent, this seems like one of the most effective tactics deployed in order to get the inside track on the best accommodation.

The opening of new tube stations at Battersea and Nine Elms is boosting business at our Nine Elms branch. DAMAC Tower, Thames City (SW8) and Battersea Power Station lead a crowded field of new, blue-chip developments, with the latter offering a stunning new retail and entertainment complex that forms the foundation of a new, much talked about community.

The Elizabeth Line creates rental mini booms

Another infrastructural phenomenon, Elizabeth Line (Crossrail) opened in 2022 to much acclaim and plenty of business for our branches, located along the length of its pan-London network.

There has been growing demand in new developments such as Dickens Yard Ealing, The Green Quarter Southall both to the West of London, as well as at Royal Arsenal Riverside in Woolwich, South East London (where we have our own lettings branch on-site). With commute times now drastically shortened, these areas have become massive targets for London’s renters, offering faster commutes for professionals who are once again travelling into the office.

Demand remains high across West London

In West London, our branches at Dickens Yard Ealing, Kew Bridge in Brentford, Imperial Wharf in Fulham and Fulham Reach in Hammersmith, have seen Japanese applicants relocating to London push up demand. Some applicants have been waiting for up to two months for a rental apartment to become available and families are also looking at Imperial Wharf and Chelsea Creek for larger homes.

North London properties sell out fast

Areas such as Hampstead, Highgate and Dartmouth Park continue to be oversubscribed as demand for larger family homes adds to the already chronic shortage of quality accommodation. Best known for pristine period properties, there is now, however, a trend towards imaginative new developments. Popular examples are Highbury Stadium Square and Woodberry Down in North London.

Staff at our Beaufort Park branch in Colindale are seeing first-hand the effect that the recent influx of Hong Kongers has had on North West London. of has seen soaring demand throughout the year, with almost no available properties at many times. A well-established and prosperous Chinese community has been a magnet for families allowed to move here under the BNO visa scheme. Through various events, seminars and advice clinics, our China Desk team, led by Penny Cheung, have guided them through the process of renting initially before deciding where and what to buy

An influx of rental enquiries from international students returning to London

The year 2022 witnessed the wholesale return of London’s international student population. With almost half a million sponsored study visas granted, their number is 71% more than in 2019 and our branches report that they make up 85% of all applications for student rentals.

Indian students are now making up a larger proportion of international students coming to the UK. There were 117,965 visas granted to Indian nationals in the year ending June 2022, an increase of 80,569 (+215%), compared to 2019. In fact, for the first time since 2011, Indian nationals now surpass Chinese as the group with the highest number of sponsored study visa grants. Chinese nationals still come in a close second with 115,056 visas granted, 4% lower than in 2019 (119,825). Together, these two main demographics comprise almost half (48%) of all sponsored study grants.

With offices in both China and India, we’ve been dealing with a constant stream of enquiries through, both from students wishing to rent in London or from parents who are planning to invest, while still providing a base for their dependents.
Contact us for an accurate rental valuation

It’s hard to predict where the rental market is heading in 2023 but with so many applicants still waiting to find a home, and no seasonal slowdown as we would usually expect at this time of year, we expect to be extremely busy in January.

So, we urgently need more instructions to meet the phenomenal demand from professional applicants. If you have a new property that is due to complete soon, or if you are unhappy with your current agent, please get in touch as soon as possible.

Get in touch with your local Benham & Reeves branch to arrange an accurate and up-to-date rental valuation.