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Some parts of London see rental demand increase by over 200%

The boroughs where most increase is seen are those on the outskirts of central London in areas such as Barking and Dagenham and Greenwich, the study from agents Strutt & Parker shows. For example, between 2001 and 2011 Barking has seen a 230% increase and Tower Hamlets a 150% rise.

Whilst these areas have soaring increases traditionally established areas in prime central London such as Hammersmith and Fulham as well as Kensington and Chelsea have also seen increases of between 30 to 60%.

According to Stephanie McMahon, head of Research for Strutt & Parker, the rental market has spread across London in particular to the West and East. ‘It is widely acknowledged that long-term renting is now immensely common for the younger generation and even more affluent older generations are exploring this different lifestyle option and seeing how much more they can get for their money in rental rather than committing to buying,’ she said.

Zoe Rose, head of lettings for Strutt & Parker, said that it is the prime central London rental hot spots that continue to draw more enquiries than properties available to let which in turn supports healthy rental prices.

‘Although there have been noticeable price adjustments since 2011 there are certain properties where we simply just can't get enough of them. In particular, one to three bedroom smaller and mid size accommodation is the property of choice and thus supporting optimum rents in this sector of the market,’ she pointed out.

‘This synchronises with our tenant profiles of younger, longer term renters extending to families. It's fundamentally changing what's hot and what's not in terms of what they wish to rent. This is putting pressure on the very top of the market which remains a market in its own right and one where prices have enjoyed the least favourable increases,’ she added.

The areas of most change have been those peripheral to zone 1, where government investment and long term infrastructure improvements have resulted in demand. ‘We cannot overlook our prime markets such as Kensington and Chelsea and Westminster though. Here, although the growth levels have not been as dramatic, we still have some of the biggest London rental markets overall,’ explained McMahon.

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