Lon­don rent mar­ket sees de­mand up as val­ues fall

Financial Mirror (Cyprus) - - FRONT PAGE -

De­mand in the prime cen­tral Lon­don let­tings mar­ket con­tin­ued to strengthen in Septem­ber as un­cer­tainty per­sisted over short term pric­ing trends in the sales mar­ket.

The num­ber of ten­an­cies agreed in the three months to August rose 15.7% and marked the high­est on record for the month, ac­cord­ing to the lat­est in­dex from real es­tate firm Knight Frank.

The data also shows that the num­ber of new prospec­tive tenants and view­ings rose 5.5% and 21.7%, re­spec­tively and with rent val­ues falling by 4.7% in the year to Septem­ber tenants should be eas­ier to at­tract.

How­ever there is a hes­i­ta­tion in the mar­ket, and ac­cord­ing to Tom Bill, head of Lon­don res­i­den­tial re­search at Knight Frank this pri­mar­ily re­lates to the im­pact of higher rates of stamp duty while the UK’s de­ci­sion to leave the Euro­pean Union has am­pli­fied a pre-ex­ist­ing mood of un­cer­tainty.

‘Both sup­ply and de­mand have grown markedly as tenants and land­lords await more clar­ity over the tra­jec­tory of the sales mar­ket where early lead­ing in­di­ca­tors of de­mand are strength­en­ing across higher price brack­ets,’ he said.

He also pointed out that the num­ber of new prop­er­ties com­ing onto the mar­ket rose 43.8% and the to­tal in August was the sec­ond high­est on record while April this year was the high­est month as a re­sult of changes to stamp duty for buy to let in­vestors.

Bill ex­plained that with rents falling tenants have been able to widen their search ar­eas to more ex­pen­sive ar­eas of prime cen­tral Lon­don.

‘Sup­ply and de­mand are less bal­anced in some price bands and mar­kets, which means ask­ing rents are be­ing ex­ceeded by some mar­gin in some ar­eas,’ he said, adding that this is the case for lower value prop­er­ties in some of the best City and Fringe de­vel­op­ments.

More broadly, lower price bands have been per­form­ing more strongly. Rental value growth be­low GBP 500 per week is stronger than higher price brack­ets, though it strength­ens up­wards of GBP 2,000, which re­flected a strong month for su­per prime ten­an­cies at GBP 5,000 plus per week in Septem­ber.

A break­down of the fig­ures show that only two lo­ca­tions in the prime cen­tral Lon­don mar­ket have seen rents rise. Rents were up 1% in City and Fringe year on year and by 1.9% in Kings Cross.

The rest of the sec­tor have seen rents fall, led by an 8.4% fall in River­side, while rents were down by 8.3 in Chelsea, by 9.9% in Maryle­bone, by 6.6% in Not­ting Hill and Bel­gravia, by 5.9% in Knights­bridge, by 5.5% in Hyde park, by 5.4% in South Kens­ing­ton, by 3.5% in Is­ling­ton, by 3.4% in May­fair, by 3.2% in Kens­ing­ton, by 3.2% in St Johns Wood and by 0.3% in Tower Bridge.

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