Prime London flats rentals still in doldrums - but for how long?

Reduced demand and falling rents continue throughout the London prime flats market, with values down in all areas except the south west of the capital.

That’s the news from Savills and the agency’s Jessica Tomlinson says: “The pendulum will gradually swing back towards landlords as social distancing restrictions ease and international travel slowly returns, but for now, it remains a tenant’s market.”

She continues: “The flats market is reliant on a number of factors falling into place, including the return of young professionals and sharers looking for somewhere to live close to their workplace. However there are some early indications to suggest a shift in the balance as we are starting to see people moving back into London - especially as the retail and hospitality sectors open up - as well as stock levels beginning to stabilise.”

In contrast, family house rents across London have all ticked up, most notably in the domestic family markets of south west and west London which saw rental growth of between 2.0 per cent and 2.4 per cent over the past year, a nod to the on-going demand for properties with four or more bedrooms and outdoor space.  

Savills says this puts families in competition with sharers in what has remained a landlord’s market throughout the pandemic.

Within the most central postcodes, values appear to be at or close to bottom, now sitting at around 25 per cent below mid-2015 levels. 

The agency concludes that given London’s strong international tenant base, rentals of houses in the region are largely dependent on the opening up of travel to resume activity and bring some urgency back into the market.

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