Average rents in the prime central London letting market fell by 0.3% in May and are down by 4.8% compared to a year ago, the latest index data shows.
However, the annual figure represents an improvement from the fall of 5.2% recorded at the end of 2016 and overall the rate of rental value declines is slowing as the level of new supply of rental stock coming to the market slows.
The figures from the Knight Frank prime central London lettings index also show that the declines were less marked in lower and higher price brackets.
‘At lower price points, this is the result of continued strong demand among younger professionals for lettings properties as well as the fact corporate accommodation budgets have been curbed, boosting demand at lower price points,’ said Tom Bill, head of London residential research at Knight Frank.
‘Meanwhile, above £2,000 per week, demand remains stronger due to uncertainty around the short term prospects for price growth in the sales market as a result of higher rates of stamp duty,’ he added.
The index also shows that between January and May 2017, the number of new rental properties coming to the market in prime central London fell 6% compared to 2016.
‘Relatively high stock levels have been a feature of the market since early 2015, as increased sales taxes and short term uncertainty over pricing in the sales market prompted many would-be vendors to become landlords,’ Bill explained.
