A recent shift has occurred in Prime London’s rental landscape as growth rates normalise after years of heightened activity. The latest data reveals that rental value growth across Prime Central London (PCL) and Prime Outer London (POL) has moderated, signalling a return to more historically typical levels.
Average rents across both PCL and POL remain elevated, standing at 33% and 30% higher, respectively, than pre-pandemic levels. This increase is largely attributed to a prolonged period of low supply and high demand, which pushed rents upward across Prime London. However, this balance of supply and demand underscores potential vulnerabilities. The prospect of new legislative measures, such as the upcoming Renters Rights Bill, could significantly impact the market. This legislation, which shifts the balance of power from landlords to tenants, could intensify supply demand imbalances if not carefully calibrated, affecting future rental growth and availability.
Despite these shifts, there are signs of stabilisation in new listings. Data from Rightmove shows that new property listings in August were only 7% below 2019 levels—the last year of relative normalcy for the lettings market. Additionally, between January and August 2024, new listings in both PCL and POL were 6% higher than the same period in 2023, indicating a gradual increase in available properties.
As the market recalibrates, both landlords and tenants may find new opportunities within Prime London’s evolving rental sector. Understanding these trends will be crucial as we move through a period of legislative change and market normalisation.
Sources: Rightmove, Primeresi
