Increasing numbers of tenants are quitting the home counties for the capital, driving up London rents in the process.
According to Hamptons, a record 30 per cent of homes let in London so far this year have been to someone who was previously living outside the capital, compared to just 12 per cent in 2020.
In total, 55 per cent of these incomers arrived from Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent or Surrey, compared to a pre-Covid average of 40 per cent.
Rents rocketed by 12.3 per cent over the last year as a result – the fastest rate since the Hamptons Lettings Index began in 2013.
Two areas of Hertfordshire were named among the 10 places renters are most likely to leave for London in 2022, with 27 per cent of Hertsmere tenants and 20 per cent of those in St Albans quitting Herts for the capital during 2022.
Work is less likely to be the motivation behind renters deciding to move to London now than it was pre-pandemic however, with 31 per cent moving for work in 2022 compared to 40 per cent in 2019.
Rents have been rocketing nationwide, with the cost of a newly let home rising by 9.8 per cent during the last year; over half of all rental growth recorded over the last five years (18.2 per cent) came within the last 12 months.
A shortage of supply is another factor in this strong growth, with 30 per cent fewer properties available to rent this April than last. London has recorded Britain's third largest fall in rental stock, down 64 per cent behind the North West (down 76 per cent) and Yorkshire & Humber (down 67 per cent).
Aneisha Beveridge, head of research at Hamptons, said the current pace of rental growth in London is "predominantly down to the capital playing catch up with the rest of the country.
"Today, the average rent in London stands 103 per cent above the average outside the capital," she said. "While this gap is up from 96 per cent a year ago, it remains below the 120 -130 per cent pre-Covid premium which has been eroded by strong rental growth outside the capital in recent years. But the current pace of rental growth in London is likely to push the premium closer to its pre-Covid level inside two years.”
Aneisha added that tenants' return to the capital post-Covid is driving rental growth to record highs.
“The rise of remote working means that fewer tenants are moving to the capital specifically for work. In fact, a growing number of tenants choosing to live in London are working fully remotely and could live nearly anywhere in the country.
"The footloose nature of many jobs today means that it will be culture and lifestyle rather than employment that becomes the capital’s biggest draw."
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