London prices have recorded the strongest quarter of growth in over a decade as the capital’s prime rental market now leads the recovery.
A return of office workers and employees relocating for work meant prices were up 2.9 per cent in the third quarter, the strongest quarter of growth since March 2011, according to Savills.
An inflow of workers returning to the City has led to significant price growth in Shoreditch (up 9.6 per cent) and Clerkenwell (up 7.4 per cent) in the three months to the end of September.
What’s more, south west locations favoured by families – including Wandsworth and Wimbledon – have also seen price increases.
Prime central London rental growth has swelled 3.6 percent on the quarter, well ahead of quarterly growth in the prime commuter belt, up by 1.4 per cent.
Real estate agents Savills found that growth in cities was up by eight per cent while villages, towns and rural areas saw growth around six or seven per cent. This marks a reversal of the lockdown trend, when people fled urban areas for countryside escapes.
The prime lettings market was in a “frenzy” thanks to a return of international travel plus the easing of lockdown restrictions, according to Amelia Greene, director in the prime lettings team at Savills.
She added: “Demand is up across the board – and nearly every branch is reporting competitive bidding. Hotspots in North and East London have been particularly popular due to workers’ desire to walk to the office, and the return of students to the capital.”
Landlords would reap the rewards of the trend with tenants battling for properties by paying a full year of rent upfront or committing to properties before viewing them, Greene added.
Renters’ willingness for flats has started to recover with price rises for prime London flats outperforming houses for the first time since December 2019.
Although lockdown made renters realise the value of green space, properties with no outdoor space have made a come back with a 3.5 per cent growth.
Tenants have been forced to compromise on features like gardens because of a shortage of properties on the market.