Luxury London Rental Discounts Disappear in Boon for Landlords
(Bloomberg) -- The rental market in London’s best districts was booming before omicron’s spread led the government to tell staff to work from home where possible.
Rents were higher in November than they were before the pandemic, according to a report by researcher LonRes, as a drop in supply led to a 20% increase in rents compared to a year ago.
In prime central districts, renters are paying more than the asking price for the first time since LonRes began compiling data in 2005, a boost for landlords who had to offer large discounts when the city emptied out last year during the initial outbreak of Covid-19.
“In the short-term chronic lack of supply means that rental increases could be here to stay and we expect further rental rises into early 2022,” the report said.
LonRes warned that the outlook for the prime rental market relies on staff returning to the office. That may be complicated by the spread of the new variant, which caused a sharp drop in demand for homes in the city as renters sought additional space outside the capital.
The research also found that apartment values in central London’s best districts are proving the exception to the U.K. housing boom.
The value of those homes fell 1% in the three months through November compared with pre-pandemic levels. House prices in the same areas rose 9.6% per square foot in the same period.
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