The firm’s latest Residential Investment Monitor says that rents on the Isle of Dogs have increased by 10% as a result of an increase in City recruitment and an upturn in demand from tenants seeking out affordable locations.
‘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,’ said Sue Foxley, head of research at Cluttons.
‘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,’ she explained.
‘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 United States. The proportion of US applicants rose to 15.5% in July, from 9.4% in June,’ she added.
Along with the Isle of Dogs, Cluttons has found that Knightsbridge is also performing well, boasting average weekly rents of £1,840, a 21% increase on 12 months ago.
‘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% higher on the same month last year,’ said Foxley.
‘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,’ she added.
During the third quarter of 2013 the Isle of Dogs at 13.6% and Knightsbridge at 21%, recorded the highest volume of annual rental value growth across prime central London compared with the third quarter of 2012.
The report also shows that single households now represent over three quarter of new lettings in the capital, with tenants in their twenties representing 42% of all lettings.
Average weekly rents across prime Central London have reached £1,022, just £2 off from the record recorded in the third quarter of 2011.
