This has been driven by an increase in demand from corporate tenants working in London and in the first half of the year nearly 40% of all tenancies agreed were to international tenants led by individuals from North America.
The report explains that tenants relocating from the US are often present during the first half of the year, with many wanting to move before the new American school term starts in August.
Not only have activity levels risen in the second quarter, but there are indications that there could be a further pick up in the coming months with the number of potential tenants registering with Knight Frank lettings agents over the three months to June rising by 49%, compared to the same period last year.
Prime rents in the Home Counties increased by 2.6% in the second quarter of 2014, a marked improvement on the 0.7% growth in the first quarter of the year.
The recent strong performance of the Home Counties lettings market has come as global economies return to health, and business confidence in the UK grows, prompting companies to expand and increase corporate relocations. In fact, the latest ICAEW/Grant Thornton UK Business Confidence Monitor shows that business confidence was at a record high level in the second quarter of 2014.
Corporate demand for rental accommodation has come from a range of industries including the oil and gas, tech and mining sectors.
However, despite two consecutive quarters of rental growth, over the 12 months to June 2014, rents are still 3.8% lower.
Looking at supply, the number of new instructions, regarded as a good indicator on the level of stock coming onto the market, was 14% higher across the Home Counties between April and June compared to the same period last year, although the rise varied depending on location.
‘The strong prime sales market in Beaconsfield, for example, where prices rose by 5.4% over the year to June 2014, has resulted in some landlords deciding that now is a good time to sell,’ said Oliver Knight of the firm’s residential research team.
‘This has resulted in a fall in the number of available properties to rent and could serve to underpin further rent rises in the area,’ he added.
