These findings come following an increase in City recruitment and an upturn in demand from tenants seeking out affordable locations.
Sue Foxley, head of research, Cluttons commented:
"We have seen rents on the Isle of Dogs rise by 10 per cent following a fillip in City recruitment as the finance sector reports a rise in new recruits. This heightened demand will begin absorbing some of the increased levels of supply we have been recording, which has capped rental value growth elsewhere throughout the summer.
The relatively affordable average weekly rents of £370 and the convenient location offered by the Isle of Dogs is proving to be popular with this particular tenant profile, who now reflect a third of total lettings in London. We are seeing the majority of new City workers moving from within the UK, however the summer months have also seen an upturn in those coming from the US; the proportion of US applicants rose to 15.5 per cent in July, from 9.4 per cent in June."
Along with the Isle of Dogs, Cluttons has found that Knightsbridge is also performing well, boasting average weekly rents of £1,840 - a 21 per cent increase on 12 months ago.
Sue Foxley added:
"In Knightsbridge, demand is coming from a different rental group with growth being underpinned by dwindling supply and a lack of movement in the market. For prime areas we have seen a significant increase in tenants with the volume of lettings activity in August over 30 per cent higher on the same month last year.
Although the Olympics clearly created a market anomaly last summer, there is clear evidence of increased interest, with activity in the usual quiet summer months sitting ahead of the previous three months. This trend looks set to continue into autumn with initial figures suggesting buoyant market conditions."
During Q3, the Isle of Dogs (13.6 per cent) and Knightsbridge (21 per cent) recorded the highest volume of annual rental value growth across prime Central London on the same period last year. Single households now represent over three quarter of new lettings in the Capital, with tenants in their twenties representing 42 per cent of all lettings. Average weekly rents across prime Central London have reached £1,022 - £2 shy of Q3 2011 record.
