High demand for rental properties in prime London

The prime rental market is London is experiencing strong demand, new research has revealed.

A report by Savills showed that the market achieved rental growth of 1.4 per cent on the back of strong demand for one and two bedroom flats.

Consumers are also increasingly demanding smaller homes, and this in turn has helped to result in the highest quarterly rental growth in prime Central London hot spots and East of City locations.

Lucian Cook, director of residential research of Savills, said: "As is typical at this time of year, when the University year begins, wealthy international students drove the demand most evidently in prime Central London due to the proximity of world class universities.

"In contrast, young professional sharers or couples are drawn to less expensive prime locations such as Canary Wharf, Wapping or Islington. This reflects the fact both areas provide easy access to the financial services centres of Canary Wharf and the City, as well as the emerging tech centres in East London."

Areas such as Hampstead, St John's Wood, Fulham and Richmond were the most popular among 30 to 60-year-olds.

Savills research showed that rental growth in those areas has been weaker over the past year than in the student/sharer markets, with families continuing to be attracted to the stock on offer and relative value for money.

Three bed properties have seen the strongest growth with average rental values across the prime commuter zone three per cent above their peak.

Mr Cook added: "In locations of high supply we expect rents to come under pressure, with a potential dampening effect on rental growth across the wider prime rental market despite a broader and deeper pool of tenants."

Published 13th October, 2014

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