State of the Market - Q3 2021

Data from the GLA suggests that during Q3 of 2021, private rents across London were rising, against a backdrop of stabilising property prices. London is currently being outperformed by other regions of the UK, as has been the case for some time now. The rental market in London is seeing rapid change as we move back to a situation where demand is outstripping supply; a complete reversal from 2020 where the pandemic created an excess of properties as priorities shifted.

New build demand seems to have fallen in 2021, with much of the interest in the sales market driven by second-hand properties. Q2 and Q3 saw strong interest in London which has now begun to plateau.

Completions and approvals of new homes have so far held steady, however starts on larger private schemes are down and the impact of this is expected to feed though during 2022. Construction costs, delivery delays and rising wages have all put pressure on development viability, leaving developers reluctant to commit at this time.

Of interest to HMO landlords is news that London's flat-sharing market has tightened dramatically in recent months, with the number of people searching for rooms overtaking the number of rooms available for the first time since the start of the pandemic.