The firms said that this represents a slowdown in the rate of increase compared to 2011 when rents rose by 19.1% over the year, but is still a healthy level of growth.
‘Demand remains healthy in and around Covent Garden, with limited supply. However, a squeeze on corporate budgets, limiting applicants to properties under £700 per week has dampened rent increases in the beginning of 2012,’ explained Hannah Read, head of residential lettings for Covent Garden and Soho.
During the first quarter, two thirds of demand was from overseas tenants, of which US and Far Eastern tenants were the most dominant. Most sought after were one bedroom apartments. Void periods remained low at two weeks or less on good quality apartments.
‘We achieved a price of over £60 per square feet on two one bedroom flats in the heart of Covent Garden within hours of them coming on to the market when the average price is typically between £45 to £55 per square feet,’ said Read.
‘We are predicting a continued squeeze on supply, strong demand and restrained corporate budgets creating rental growth during 2012 of around 5%,’ she added.
