The average length of tenancies in the prime central London lettings market has risen to over 16 months over the last two years, a new analysis shows.
Continuing uncertainty in the sales market around the trajectory for price growth means tenants are more prepared to commit to longer tenancy periods, according to the lettings report from real estate firm Knight Frank.
It also shows that annual rental value growth in Mayfair was 5% in July, making it the strongest performing market in prime central London.
Meanwhile, the number of tenancies agreed per Knight Frank office in prime outer London rose to a three year high in July.
Strengthening demand among corporate tenants, including oil and gas executives in South West London in response to the higher oil price, has underpinned activity, the report also explains.
Rental values between £1,500 and £2,000 per week declined by 0.1% in the year to July in prime outer London. It was the most modest decline by price bracket and underlined the relative strength of demand for family houses on the back of strengthening corporate demand.
But overall rents are varying considerably depending on value. For example, in the prime central London market rents were up 3.2% in the last six months in the £250 to £500 per week bracket in central London, and up 3% year on year.
In the £2,000 per week bracket rents increased by 2.5% over six months, by 2.4% in the £1,500 to £2,000 per week sector and up by 2% in the £1,000 to £1,500 sector over the same period.
But month on month the figure is more volatile, down by 0.5% in the £500 to £750 per month bracket, down 0.6% in the £1,500 to £2,000 sector and down 0.5% in the £2,000 plus bracket. But they increased by 0.3% in the £250 to £500 per week sector, by 0.1% in the £750 to £1,000 sector and by 0.5% in the £1,000 to £1,500 bracket.
In outer London rents have also been up and down depending on the rental price bracket, varying from a fall of 4.6% year on year in the £1,000 to £1,500 per week sector to a rise of 0.9% year to date in the £250 to £500 per week, the £500 to £750 per week and the £1,500 to £2,000 per week sector year to date.