Rents across prime London increased by 0.9% during 2019, marking a second successive quarter of annual growth. The regions of prime West London, from Hammersmith to Ealing, and prime South West London, stretching from Clapham to Richmond, saw the strongest growth over 2019 of 2.9% and 1.6% respectively.

This growth was primarily driven by low levels of stock, while demand has remained steady. Indeed, 68% of our agents across London reported a lack of stock as their biggest challenge over the previous three months.

This lack of stock has particularly benefitted the market for flats in London, where rents increased by 1.2% over 2019 compared to growth of 0.5% for houses. Tenant demand remains strongest at the lower end of the prime market, fuelling growth for smaller, less expensive property. But some markets have seen record prices for family houses, such as Barnes, which is very much driven by best-in-class properties.

While most London regions are now recording rental growth, the prime central London market has continued to see small price reductions, with rents falling by 0.9% during 2019. Value and condition remain the major driving factors in this market, with many tenants searching for the right property at the right price while being flexible on location.

A slow sales market last year saw an increase in accidental tenants choosing to rent rather than buy, and also prevented accidental landlords from selling.

Almost three-quarters of our agents in markets in London’s commuter belt saw an increase in ‘try before you buy’ tenants over the last three months of 2019. These were made up both of tenants trying a new area before they committed to a purchase, and those who had already sold their property but had not yet found one to buy.

Rents for smaller properties remain strong in the commuter zone. Again, this is being driven by a lack of stock. Prime housing remains price sensitive in these markets, while lower-value stock continues to sell well – proving an incentive for landlords looking to exit the market.

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