However, the rise did little to reverse the annual decline in rents in the area, which have fallen by 4.3% compared to one year previously, the report from Knight Franks shows.
It comes against the background of an improving economic picture in the UK, which is starting to boost corporate lettings activity in the area. Demand from staff relocating to work in London, especially in the financial services sector or for one of the blue chip companies based in the Thames Valley, has historically formed a large part of the market.
According to the latest CBI/KPMG London Business Survey, which is completed by chief executives and business leaders from the city, London firms’ optimism about the economy has soared to its highest level since the end of 2010. More than half of London firms, 56%, said they are continuing to increase their headcount.
Rents rose or were unchanged in five of the seven areas covered by the index in the first quarter of the year. In addition to a 4.9% rise in Guildford, there were rises of 3.6% in Beaconsfield, 3.5% in Virginia Water and 1.1% in Ascot. In Henley, rents were unchanged compared to the previous quarter.
The number of new applicants registering with Knight Frank lettings agents in the Home Counties rose by 38% in the first three months of 2014 compared to the same period last year. Viewings have increased by 11% over the same time.
This has contributed to a significant rise in the number of tenancies agreed over the course of the quarter, with deals 74% higher year on year.
The firm said it is interesting that in line with the strengthening sales market in the area as price rises begin to ripple out from London, agents have noted an increase in the number of ‘try before you buy’ family tenants in the Home Counties who want to get to know an area before making a commitment to purchase.
Activity has been focused on the sub £3,000 per month price bracket so far in 2014, with tenancies agreed at this level accounting for almost half of the total number of deals. However, as we enter the summer months, when corporate demand tends to be highest, rising demand from relocating executives, both from London and internationally, is likely to result in more deals being completed in the £3,000 plus per month bracket, the report predicts.
