Number of new tenancies in prime London locations highest in a decade

Number of new tenancies in prime London locations highest in a decade

10/08/2021

Number of new tenancies in prime London locations is highest in a decade as workers return to the office after Covid lockdowns

  • New data shows the number of prospective tenants is 56% higher than last year
  • Workers are renting London hubs after selling up for more space in lockdowns
  • Experts also cite return of overseas tenants and students as reason behind rise 

The number of tenancies started in prime London locations in September was the highest monthly total in the past 10 years, an estate agent has reported.

The number of new prospective tenants registering was 56 per cent higher than in September last year, Knight Frank, a residential and commercial property consultant said.

Offices reopening, overseas tenants arriving in bigger numbers and people returning to universities are behind the figures, it suggested.

The number of tenancies started in prime London locations in September was the highest monthly total in the past 10 years, an estate agent has reported, as workers return to the office

In what industry experts branded the ‘race for space’, many residents from the capital sold up and moved out of the city in a bid to find properties with more space during lockdowns.

Renters swapped inner London transport hubs for homes further afield as the need to commute became less important than a desire for space, data from RightMove showed last year.

But as workers are now returning to the office, Knight Franks says data suggests office workers are renting a London base having moved out of the capital as part of the ‘race for space’ trend.

 The company compared how many properties were rented as a proportion of all listings in Greater London and an area that includes locations around the City and Canary Wharf, according to OnTheMarket.

The neighbourhoods in the latter group include E14, the Southbank, Wapping, Shad Thames, south Islington, E1, E2, E3 and the square mile itself.

The rate in both groups was 13 per cent at the start of the year but there has been a divergence in recent months.

Knight Frank says the renting market has heated up in and around the financial district of London as workers who sold up for more space in lockdown are renting hubs near the office

While 22.5 per cent of Greater London listings were rented in August, the figure was 28 per cent in areas around the two financial districts.

The estate agent added that average rental values rose on a quarterly basis by the largest amount in a decade in prime central (2.8 per cent) and prime outer London (2.6 per cent).

The prime property figures broadly cover the top 10 per cent of properties by value within Knight Frank’s office patches.

David Mumby, head of prime lettings at Knight Frank, said: ‘We are seeing competitive bidding across prime central London markets, with new tenants mainly being ‘London leavers’ who now are returning to the office, and international students who are still agreeing properties purely based on virtual viewings.’

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