Knight Frank revealed that average rents in the best central London rose 0.7% as of February, while major external rents in London increased by 1%.
Rent growth in February was not as dramatic as it was three years ago, when two parts of the capital grew by nearly 20%.
Although supply has increased since then, Knight Frank said there are signs that tensions over future legislation changes will affect landlord sentiment.
The upcoming bill of rights for renters includes proposals, which means that evictions of tenants may become increasingly difficult and increase risks in the event of rent income.
Apart from that, landlords will have to weigh their options against stricter green legislation, rising mortgage rates and the more disadvantaged inheritance tax rules introduced in the budget.
While the number of new rental listings in major central and major outer London in February was 12% higher than three years ago, it was 5% lower than the same month last year, according to RightMove.
Knight Frank suggests that there is a degree of hesitation among landlords, which will maintain or increase rental pressure.
Independent real estate agencies revised their own rental value forecasts in November due to legislative uncertainty and expected growth of 3.5%.
In terms of demand, the number of new potential tenants registered in London in the first two months of this year was 1% higher than last year, with the number of leases increasing.
Meanwhile, the number of supercars in the six months to February was 9% higher than the same period 12 months ago.
The company’s demand is also stronger than last year. In February, the number of inquiries about rental properties in the UK was 18% higher than in 2023.
Companies move to London and surrounding areas usually come from the fields of energy, finance, professional services, legal and technical.
“In the first two months of this year, it felt like it was the same. Although in some low-value markets, there was a shortage of stock supply.”
“Tenants hope to have stable supply capacity for the rest of the year.
