Inner London bore the brunt of the pandemic’s impact on the rental market which saw a decade of rental growth wiped out. In previous downturns, Inner London has typically been the region to lead the rest of the country, but this time around it was the only area where rents fell for 13 consecutive months, while rents in other regions reached record highs, according to the June Monthly Lettings Index by Hamptons. 

However, it appears that late spring marked the bottom of the Inner London market. For the first time since April 2020, the average rent in Inner London rose on a monthly basis, averaging £2,103pm in June 2021. While the average rental home in Inner London costs 16.5% or £415pm less than it did this time last year, rents jumped 4.3% month-on-month between May and June, the largest monthly increase on record. June was also the third straight month that the annual decline in rents slowed.

The reversal in the direction of rental growth has been driven by more tenants returning to the capital. Last month, the number of tenants registering to rent in Inner London was up 16% on June 2020 levels and up 45% on June 2019. Zone 2 recorded the strongest growth in demand, but this has been almost completely driven by domestic, rather than international tenants, according to Hamptons.