Rents in London’s prime lettings market increased by 1.1% in the 12 months to June and 1.5% quarter on quarter with the sector starting to see growth, the latest analysis report shows.
It was the second successive month of growth following a 28 month run of declines with the pickup happening since the end of October 2017, according to the report from real estate firm Knight Frank.
It also shows that rental values have strengthened as supply has declined as more landlords explore a sale following tax changes and the number of lettings listings above £2,000 per week rose 0.5% in the year to June compared to the previous 12 months.
This reversed a pattern of declines that occurred as more landlords listed their property for sale after tax changes. The reversal may indicate pricing expectations for some were not met in the sales market, the report points out.
The number of tenancies agreed in prime outer London was 17% higher in the year to June than the previous 12 month period, Knight Frank data shows. The recent pattern of increases began in October 2017.
A breakdown of the figures show that rental values between £500 and £750 per week declined by less than any other price bracket in the year to June. ‘It has been the strongest performing price band since the start of the year and reflects the relative strength of demand for lettings properties at this price point,’ the report explains.
In the prime central London market rents in the £250 to £500 per week bracket increased by 0.4 month on month, by 1.8% quarter on quarter and annually by 2.6% while in the %500 to £750 sector they were up by 0.2%, 1% and 0.9%.
In the £750 to £1,000 per week sector rents increased by 0.2% month on month, by 1.3% quarter on quarter and 1.5% year on year. Rents in the £1,000 to £1,500 per week sector actually fell marginally by 0.1% on a monthly basis but increased 1.1% quarter on quarter but are down 0.9% year on year.
Rents at £1,500 to £2,000 per week recorded a monthly rise of 0.2%, were up 1.3% quarter on quarter but down 0.1% year on year while at the upper end of the market at £2,000 plus per week rents increased 0.1% on a monthly basis and by 1.6% quarter on quarter but are still 2.1% below a year ago.
In outer London the bottom end of the prime market saw rents rise by 0.1% month on month, by 0.5% quarter on quarter but down 0.5% year on year. In the £500 to £750 per month sector rents fell 0.3% on a monthly basis but increased 0.3% quarter on quarter but are still down 1.2% year on year.
In the £750 to £1,000 per week sector rents fell by 0.1% on a monthly basis but increased 0.4% quarter on quarter and are now down 2.5% on an annual measure. In the £1,000 to £1,500 sector they were down 0.2% month on month, up 1.2% quarter on quarter but are some way below year ago levels, down by 5.1%.
At the top end of the prime lettings market in outer London rents have done better. IN the £1,500 to £2,000 per week bracket rents rose by 0.2% month on month, by 1.3% quarter on quarter and are just 0.1% down year on year while in the £2,000 per week plus sector they increased by 0.1% on a monthly basis, by 1.6% quarter on quarter but are still 2.1% below June 2017.
