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Escape from the country: home counties leavers driving record London rental growth

The bright lights of the city have been tempting tenants back, primarly for culture and lifestyle reasons  (Getty Images)
The bright lights of the city have been tempting tenants back, primarly for culture and lifestyle reasons (Getty Images)

Renters leaving the Home Counties for London are driving the record pace of rental growth in the capital, according to the latest Hamptons Lettings Index.

London rents have soared by 12.3 per cent over the past 12 months – the fastest rate since the estate agent’s records began in 2013.

The average rent for a newly-let London property currently stands at £1,886 a month, compared to £1,680 this time last year.

So far in 2022, one in three new London tenancies has been secured by someone moving from outside of the city, compared to 12 per cent in 2020, when many renters retreated to parents’ homes or more affordable areas during the pandemic.

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Those leaving the surrounding counties of Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent or Surrey are leading the charge, representing over half of all tenants moving into London this year, compared to 40 per cent pre-Covid.

Extra enthusiasm has been shown by renters from Wokingham in Berkshire, Hertsmere in Hertfordshire and Epping Forest in Essex, with roughly one in four making the big move to the capital.

Places with the most tenants leaving for London

Wokingham

28%

Hertsmere

27%

Epping Forest

25%

Epsom and Ewell

23%

Hart

22%

St Albans

20%

Southend-on-Sea

16%

Elmbridge

15%

West Berkshire

14%

Guildford

13%

Unsurprisingly, given the rise in home working, just 31 per cent of tenants are moving into London for job purposes, compared to the 40 per cent who did so in 2019.

Instead, renters are either heading to the capital to study, or because they have sold their home or had a change in family circumstances.

Fewer tenants have been making longer moves from big northern cities, with the average new London renter moving 36 miles, down from 45 miles in 2019 and 50 miles a decade ago.

A capital making its comeback

London rental growth has outpaced the nationwide average of 9.8 per cent for the second consecutive month, after previously lagging behind the rest of the country for 26 months on the trot.

Thanks to the bounceback in new Inner London rents, which are currently averaging at £2,513 per month, this is also the first time since the pandemic began that the capital has been in the top three regions for rental growth, beaten only by the South West’s 13.9 per cent ramp-up.

This strong return to form continues to be underpinned by demand outstripping supply, with the capital recording a 64 per cent plummet in rental stock from pre-Covid levels.

‘Tenants are returning to the bright lights of the city’

Aneisha Beveridge, head of research at Hamptons, said: “With Covid being pushed further to the back of people’s minds, life in the capital is slowly returning to its new normal.

“The footloose nature of many jobs today means that it will be culture and lifestyle rather than employment that becomes the capital’s biggest draw. Tenants are returning to the bright lights of the city and this is driving rental growth to record highs.

“Today, the average rent in London stands 103 per cent above the average outside the capital. While this gap is up from 96 per cent a year ago, it remains below the 120 to 130 per cent pre-Covid premium, which has been eroded by strong rental growth outside the capital in recent years.

“However, the current pace of rental growth in London is likely to push the premium closer to its pre-Covid level inside two years.”