London is back: Influx of new residents picks up as 1 in 3 homes are let to tenants from outside the capital
It has been revealed that nearly three in every 10 homes let in London so far this year have gone to people who were previously living outside the capital.
Some 30 per cent of these properties have gone to tenants who were previously living elsewhere, according to research from sales and letting agent Hamptons, shared with Morning Wire this morning.
It is the highest figure in at least a decade and compares to a five-year pre-Covid pandemic average of 23 per cent, the report said.
The trend marks a sharp reversal compared with 2020, when just 12 per cent of London tenants came from outside the city.
During lockdown, many renters moved back in with parents or to more affordable or more rural areas.
New arrivals
The majority (55 per cent) of tenants recently moving into London came from the surrounding Home Counties – locations including Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent and Surrey.
The locations tenants are most likely to leave for London in 2022 include Wokingham, Hertsmere, Epping Forest, Epsom and Ewell, Hart, St Albans, Southend-on-Sea, Elmbridge, West Berkshire and Guildford, Hamptons said.
There is also a trend of fewer tenants moving from northern cities to London, which has shortened the average distance travelled by a tenant moving to the capital.
The average tenant moving to London moved 36 miles this year, down from 45 miles in 2019 and 50 miles a decade ago.
Despite the resurgence in tenants moving from outside London, fewer are moving primarily for work.
Just 31 per cent of moves into London so far this year were primarily because of work, compared with an average of 40 per cent in 2019, Hamptons said.
Instead, tenants were increasingly likely to move to study or because they had sold their home or due to a change in family circumstances.
Rental prices
Those making the move to London may find they need to have deep pockets as they are faced with rapidly rising rental prices.
The average London rent has rocketed by 12.3 per cent annually to stand at £1,886 in April. In inner London, rents have soared by 22.1 per cent annually to stand at £2,513 on average.
The figures came from Hamptons’ analysis of data from Countrywide, a network of estate agents which includes Hamptons.
Aneisha Beveridge, head of research at Hamptons, said: “Tenants are returning to the bright lights of the city, and this 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.”
Aneisha Beveridge
“The current pace of London rental growth 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.
“While this gap is up from 96 per cent a year ago, it remains below the 120 per cent to 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.”