Tenants in London’s most upmarket neighbourhoods are paying more than £100 a day to rent two-bedroom flats, as increasing numbers of students and company rentals fuel demand for small homes in central locations.
Figures from property investment firm London Central Portfolio (LCP) show that in prime central London the average rent on a two-bedroom flat has hit £707 a week, while one-bedroom properties are renting for £452.
In Knightsbridge a two-bedroom property will set tenants back £848 a week, while in both Kensington and Notting Hill the typical rent on a similar property is £768.
LCP said one- and two-bedroom flats in the centre of the city were popular with corporate renters and international students, and that demand was fuelling rental growth. One-bedroom homes were quickest to be let, with the turnaround in tenancies just 16 days, while two-bedroom properties were empty for an average of 24 days.
When rents were averaged across both property sizes, LCP said Mayfair had lost its crown as the most expensive place to live, with the cost dropping by 14.85% year-on-year to £678 a week.
Meanwhile, Knightsbridge has recorded the biggest rise, with rents up by 19.4% to an average of £732 a week. Across prime central London, LCP said rents have edged up 4.2% over the past year to £602 a week.
“The key dynamic in this marketplace remains location over size,” said Naomi Heaton, CEO of LCP. “The squeeze on rents during the credit crunch, as corporates underwent stringent belt tightening, has not relaxed meaning smaller properties remain the most popular among corporate tenants. The huge influx of international students, often living on their own, adds to this demand.”
LCP said older stock had seen a 1.3% rise in rents, while newly refurbished properties had seen prices rise more quickly.
Heaton said: “There has been a paradigm shift among tenants who increasingly demand immaculately presented flats and service on tap.
“Landlords need to realise that tenants are looking for a complete lifestyle experience if they are to maximise yields and minimise voids.”