Tech employees are driving demand for prime rental properties in London as Silicon Valley firms … [+]
Knight Frank
Tech employees are driving demand for prime rental properties in London as Silicon Valley firms expand in the U.K., a new report has revealed.
According to the latest London residential review report from Knight Frank, there has been a 10% increase in the number of tech employees looking for homes to rent in the British capital between 2018 and 2019.
The news comes after an announcement by Facebook that it will create 1,000 new jobs in London this year.
“This trend has gathered pace as tech companies expand their U.K. footprint and is more than compensating for any belt-tightening among financial companies,” said David Mumby, regional partner at Knight Frank.
‘Tech tenants’ are looking to pay between £1,000 ($1,300) and £4,000 per week across prime central London locations.
“Marylebone has been a particular hotspot for them following the revival of the High Street and surrounding area as a foodie and boutique shopping area attracting an upwardly mobile, affluent young demographic,” Mumby said.
In the £1,000-£4,000 price band, the number of new rental contracts soared 35% between 2018 and 2019. Over the same period, the number of new applicants rose 22% while viewings increased 18% year on year.
Tom Bill, head of London residential research at Knight Frank, added that another factor pushing tech workers to rent rather than buy is a planned legislation change.
“The new government has indicated it will increase stamp duty for overseas buyers, underlining how housing remains a sensitive political issue as it looks to redress perceived socio-economic imbalances across the U.K.,” Bill said.
“This political approach makes any reversal of recent tax changes for buy-to-let investors unlikely, maintaining further downwards pressure on supply and upwards pressure on rental values.”