The cost of renting a property in one of London’s most prestigious postcodes jumped 28.3% from the previous year, due to a shortage of rental properties and a booming demand.
There are now 50% fewer rental properties on the market than before the pandemic, according to new figures from LonRes.
The stock-outs come as demand for rental properties in London’s swankiest postcodes has started to rebound from a year earlier as tenants flock to the capital’s more expensive areas.
The imbalance has seen rents in prime areas of the capital around Hyde Park and Hampstead Heath rise 28.3% over the past 12 months to levels now 5.6% above their peak pre-pandemic in 2018.
At the same time, house prices in London’s most desirable areas are now 6.1% higher than they were at the start of the pandemic, in April 2020.
The increase comes as domestic buyers have pushed up prices due to their willingness to pay a premium “to secure their dream home”, said LonRes chief executive Anthony Payne.
It is striking that properties outside central London, in areas such as Richmond, have fared particularly well compared to those in the city center, in traditionally expensive areas such as South Kensington and Primrose Hill.
Meanwhile, apartment prices have fallen 0.9% since April 2020 – although they jumped 4.5% from the previous year – amid a scarcity of international buyers buying apartments from the city center in areas such as Chelsea and Knightsbridge.