How is the lettings market in London likely to perform in 2022? We look at the rental hotspots predicted to come out on top in the new year and list the properties within those areas that investors with nouse should consider adding to their portfolios.
As the property market rebounded from a ‘work from home’ order earlier in the year and the general direction of travel for many was back to the office and face-to-face learning at universities, colour flowed back into the cheeks of London’s rental values.
Towards the latter stages of the year, Knight Frank reported a swell of corporate relocation enquiries of pre-Covid levels as international travel rules relaxed and demand surged, with the average quarterly rental value growth in prime central London at 4.2% in the three months to October. It is the highest figure since March 2011.
Of course, what will happen in London’s rental market early next year will largely depend on the severity of the Omicron variant, its impact on how and where we live, travel, socialise and work and, of course, the government’s response (still undecided at time of writing).
So, which areas have seen the strongest growth over the last six months and what does that tell us about how the lettings market will perform in 2022?
2022’s London rental hotspots
- King’s Cross
- Canary Wharf
- Notting Hill
- St John’s Wood
King’s Cross is the area of the capital that has seen the strongest growth since May (16.8%), underlining the strength of student demand. Nearby universities include Central Saint Martins, University College London and King’s College London.
Strong rental value growth in Bayswater (15.7%) is partly down to the ‘escape to the country’ trend. Many of those who moved west from London now want a 1 or 2-bedroom flat in Bayswater to have as a base in the capital as it’s so close to Paddington and Crossrail, poised to run in 2022 after a series of delays.
Strong rental value growth in areas like Wapping and Canary Wharf are explained by the fact more offices are now open, with many workers seeking a base close to work. This trend is on course to continue if further lockdowns are avoided.
Meanwhile, Notting Hill and St John’s Wood have both benefitted from the ‘race for space’, with historically-low supply driving rents higher. If Covid measures tighten further, both areas – as well as Bayswater – may experience a further pick-up in demand.
We showcase 6 properties in the London areas that have seen some of the strongest rental value growth and are expected to be in high demand next year. Explore the selection from Bayswater to Canary Wharf.