Savills hikes forecasts for London rents, with prices set to rise to new heights
Savills has hiked its five-year forecast for the prime London rental market, with rents set to continue rising to new heights.
The capital had suffered an exodus of international students and business folk, as well as Brits seeking greener pastures, during Covid-19 restrictions, which resulted in plummeting rental costs.
The estate agency now anticipates prime London rents to rise by 12 per cent this year and a total of 18.3 per cent over the next five years.
Rental growth hit 13.5 per cent in the year to June, according to Savills, its highest recorded annual increase in more than two decades.
The explosion in rental costs has been spurred by a post-lockdown spike in demand but exacerbated by a trickling supply of rental properties.
Stock levels in June were more than a third below the same month in 2019, however, applicant demand is up over 70 per cent.
“The ongoing acute lack of stock, continued strong demand from tenants in response to the capital bouncing back to life, and employees returning to offices, means that we can expect pressure on prime rents across both London and the commuter belt, at least in the short term,” Savills research analyst Jessica Tomlinson said.