London luxury rents rise as Gulf demand adds to supply crunch

Rents in London's most expensive neighbourhoods rose in March as short-term demand from families relocating from the Middle East added to the impact of impending regulations weighing on supply. The number of new rental listings in the first quarter in London's prime central and outer districts was 8% lower than a year earlier, according to Rightmove data. At the same time the number of new prospective tenants increased by 7%.

Also read | Xi's $270 billion Middle East bet limits China support for Iran

Rents in prime central London, an area Knight Frank defines as including pricey postcodes such as Kensington and Westminster, rose 1.2% in the year through March. In prime outer London, for which the broker includes districts such as Battersea and Hampstead, rents are up 2.8%.


Supply was already falling ahead of the Renters Rights Act that's due to come into effect this month and will make it harder for landlords to evict tenants. Elevated mortgage costs linked to rising inflation expectations and an increase in inquiries from families seeking to return to London because of the conflict are exacerbating the imbalance, according to Knight Frank.

Also read | Is the world finally going to tariff big tech?