The London rental market has undergone notable changes in July 2024. Influenced by factors such as supply constraints, high demand, and shifting economic conditions, rental trends across the city are evolving. Here’s an in-depth look at the latest developments.
In July 2024, rental growth in London showed signs of deceleration, particularly in prime locations. According to Knight Frank, prime London rental growth has slowed to its lowest rate since 2021, with an average increase of only 1.8% over the past year. Additionally, Zoopla reported a slight decline in average rents across London, down by 0.3% over the last quarter. However, outer London areas like Barking & Dagenham, Redbridge, and Havering have seen rental prices surge by over 10%, driven by their relatively lower rental costs compared to central London.
The imbalance between supply and demand remains a pressing issue. A significant shortage of available rental properties continues to fuel high demand, exerting pressure on rental prices. According to the Office for National Statistics, the average rent in London in June 2024 was £1,310, reflecting an 8.6% increase from the previous year. This trend aligns with the broader rental market across England.
Several key factors are shaping the rental landscape in London:
Looking ahead, rental prices in London are expected to continue rising, though at a slower pace. Strong demand for rental properties, driven by economic factors and demographic trends, will likely persist. However, significant improvements in the supply-demand balance are unlikely in the near term due to reduced investment in the private rental sector.
This report is based on data from Knight Frank, Zoopla, Cluttons, and the Office for National Statistics.
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