London property continues to endure the tougher side of the UK property market, as different studies show lettings and purchase affordability both down in the run up to Christmas.
However, the news is not all bad as the number of prime Central London tenancies agreed in the three months to November has risen 23.2% year-on-year as rents hit a seven year low.
The number of viewings was also up strongly by 18.4% and the total of new prospective tenants rose 7.8% over the same period, says leading international agent, Knight Frank.
The rise in demand came despite a moderate slowdown ahead of the Christmas holiday period, aggravated by uncertainty surrounding the United States election result.
Higher stock levels have put downwards pressure on rental values, which has boosted affordability for tenants, whose negotiation position has strengthened over the course of this year, says Tom Bill, Head of London Residential Research in the November 2016 Prime Central London Rental Index.
“Higher supply is the result of increased regulatory uncertainty in the sales market, which has meant a growing number of vendors have opted to let their property rather than sell until more clarity emerges surrounding future pricing trends.
“The pattern of higher deal volumes is more marked below £1,500 and above £5,000 per week, while activity remains weaker in between, a section of the market traditionally driven by senior executives in financial services.”
Meanwhile, a recent Hometrack UK Cities House Price Index highlights the extent to which the capital’s property values have climbed in recent years, with the price to earnings ratio in London now at a record high of 14.1. London has the highest price to earnings ratio, due to lack of supply and strong demand fuelled by low mortgage rates, which have driven house prices up 86 per cent since 2009.
At the other end of the capital’s housing ladder, the Mayor of London, Sadiq Khan, has published a draft good practice guide, which recommends that Londoners must be involved at an early stage to help shape any proposals by boroughs and housing associations for estate regeneration.
The draft guidelines, which have been developed with councils, housing associations, and residents’ groups in recent months, recommends full rights for tenants to be rehoused on newly-regenerated estates as well as a fair deal for leaseholders.
The Mayor has also set out his expectation that demolition and rebuilding should only go ahead after other ways of achieving the aim of regeneration have been considered, and where there is no loss of social housing.