Prime lettings market in London seeing highest demand or five years
The lettings market in London’s prime property market is improving, with the number of tenancies agreed rising at its highest level for more than five years, new research shows.
Overall tenancies agreed were up by 34% in the 12 months to August 2019, according to the figures from real estate firm Knight Frank and demand has been particularly strong in lower price brackets, with average rental values between £250 and £500 per week up by 3% in the year to September.
While demand is also strong in the super prime £5,000 plus per week market, average annual rental values between £1,000 and £5,000 per week are declining, and Knight Frank’s report says that this reflects more subdued demand among senior corporate tenants.
The data also shows that month on month rents in the prime central London lettings market have increased by 0.1%, quarter on quarter they were up by 0.5% and they are now just 0.1% down from September 2018.
In the prime outer London residential market rents are down by 0.1% on a monthly and an annual basis but quarter on quarter they increased by 0.3%.
The report says a decline in the level of new lettings listings in the prime central London market has moderated as more property owners respond to current levels of political uncertainty by letting rather than selling.
‘The impact has put downwards pressure on rental values, however the strength of demand has kept the average annual change broadly flat over the last 12 months. Record low interest rates have helped to underpin market liquidity and mean that a growing number of buyers are fixing for longer periods of time,’ the report says.
‘Some 96% of all mortgages issued in July were fixed rate, with the percentage of five year fixed rate mortgages climbing to 47%, which compared to 27% in the same month two years ago,’ it adds.