London rents are rising at a record pace with growth being driven by renters returning from outside the capital, according to the latest (April 2022) Hamptons Monthly Lettings Index.

Over the last 12 months, rents in London have risen by 12.3%, the fastest rate since the Hamptons Lettings Index began in 2013. It is also the second successive month that rental growth in the capital has outpaced the UK average, reversing 26 consecutive months of London rents lagging behind the rest of the country.

So far in 2022, nearly one third (30%) of all new tenancies in the capital have been secured by someone moving from outside of London. This marks a sharp rebound from 2020 when just 12% of London tenants came from outside the capital – a time when many renters left the city to move back in with parents or rent in a more affordable area. It is also the highest figure in at least a decade and compares to a five-year pre-Covid average of 23%. Inner London has become home to the majority (65%) of these movers this year, up from a more normal 50/50 Inner/Outer London split.

Tenants leaving the Home Counties have been firmly behind the bounce back, with 55% of tenants who moved into the capital this year came from Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent or Surrey. This compares to a pre-Covid average of 40%. More than one in four tenants based in Wokingham, Hertsmere and Epping Forest moved into London this year.

The shift in tenants moving into London from the Home Counties is also reflected in the distance tenants have moved. The average tenant coming to the capital moved 36 miles this year, down from 45 miles in 2019 and 50 miles a decade ago. Fewer tenants making longer moves from large northern cities is partly behind the decline, says Hamptons.