Prime property lettings market in London has been resilient in 2018
The prime property lettings market in London has been resilient in 2018 despite the uncertain political and economic background due to Brexit, according to the latest rental index report.
In prime central London rents increased by 1.1% in 2018 year on year but fell by 0.6% quarter on quarter, the data from the Knight Frank report shows.
In outer London rents were down 0.2% on an annual basis and down by 0.7% quarter on quarter, the data also shows.
Average gross yields in prime central London increased over the course of 2018, reaching 3.5% in December, the highest since April 2012.
This increase is a result of rising rents and downwards pressure on prices, according to Tom Bill, head of London residential research at Knight Frank.
‘Lettings activity across prime London markets has been resilient despite the current uncertain political backdrop,’ said Bill.
He pointed out that in November the number of new tenancies were up 12.3% in comparison to the same period last year.
‘In despite of this, there is falling supply which is projecting upwards pressure on rental values as landlords are now attempting to sell their properties following the recent tax changes,’ Bill explained.
‘This trend is suggested to have impact, with there being 12% fewer new listings in the year to November 2018 than the previous 12 month period,’ he added.
A breakdown of the figures shows that in central London all rental bracket have seen growth year on year in 2018, up by 3.9% in the £250 to £500 a week bracket, up 0.6% in the £500 to £750 a week sector, up 1.3% in the £750 to £1,000 a week bracket, up 0.1% in £1,000 to £1,500 sector, up 1% in the £1.500 to £2,000 a week sector and up 0.7% above that.
In outer London the lower end of the lettings market has seen annual growth, with rents up 1.2% year on year in the £250 to £500 a week sector and up 0.4% in the £500 to £750 a week rental bracket.
But rents have fallen by 0.6% in the £750 to £1,000 a week sector, by 0.9% in the £1,000 to £1,500 sector, by 0.8% in the £1,500 to £2,000 a week bracket and by 2.6% for the £2,000 a week plus bracket.