Unlike the sales market, the rental market is far more diverse in terms of nationality. Britons make up 35% and are equalled by EU renters who account for another 32%.
The balance was skewed towards British renters in the first half of the year but the normal distribution was restored in Half 2 as renters returned to the City. The increased share of British renters was unsurprising during the pandemic when travel was restricted, the restoration of overseas renters was a welcome turnaround in Q3.
Renters from the Far East account for a relatively high proportion too at 14%. Again, the majority of that total was recorded in the second half of the year. A British education remains a core export post Brexit.
The vast majority of tenants who took new leases in 2021 were aged between 25 and 40 years old. This is the most common phase of life to rent in central London when earnings can be high in relation to other spending commitments. This is above the 5 year average of 66% and probably reflects the mass return of office workers and young professional renters in Q3 2021.
Despite the atypical nature of 2021 and the exceptionally sluggish rental market in Half 1, the occupation profile was surprisingly consistent with the long term average. Students made up around one quarter and banking/financial just under a quarter.
Tech Media and Telecoms (TMT) accounted for 10%, also in line with the long term average from 2015-2021. Tech companies are a large employer in our markets with a highly mobile and well-paid workforce which is an important driver of the local economy. While tech companies are well placed to implement agile working and often provide the means to businesses in other sectors to introduce remote working practices, it is clear that they still value the benefits associated with physical office spaces and agglomeration economies. It is widely acknowledged that recruitment in competitive sectors is easier in London because of its attraction for a global workforce.
Singles make up a disproportionate share of renters over the past year – perhaps reflecting the return of office workers who have relocated families to non-urban locations and need a base in London for a few nights a week.