Viewing figures in the letting market in London and the Home Counties hit a 10-year high at the end of August, according to new research by Knight Frank.
According to the property firm, many prospective tenants have been taking advantage of falling rents, with many seeking more outdoor space.
The cause of weaker rental values has been a strong supply of properties as owners opted not to sell during the pandemic, exacerbated by the addition onto the market of many short-term lets.
In the 12 months to July, average rental values in prime central London declined 5.8%, while in prime outer London the decrease was 5.4%.
In such a tenant’s market, more viewings are typically undertaken before a let is agreed, which will also have helped push the figure to a 10-year high.
But the number of tenancies started suggests there is more happening than high numbers of viewings.
For most of the summer, the number of tenancies was about a third below the level seen last year. In the week ending 22 August, the figure was 17% higher, suggesting downwards pressure on rental values may start to weaken.
Tom Bill, head of residential research at Knight Frank, said: “Part of the explanation is the unusual seasonal pattern of activity in 2020. Students account for almost a quarter of the market and uncertainty around the start of the new academic year meant July was quieter than normal.”
He added: “It is also true that London will remain an attractive destination for overseas students irrespective of how long it takes for Universities to return to more normal conditions. Demand is strong in the capital due to cultural as well as academic reasons and many students have worked for years with the specific aim of a place at a London university.
“Should flight schedules around the world continue their return to normality, this will support demand in the normally quieter final quarter of the year and could lead to a few more seasonal records being broken.”
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