Rents continue to fall in prime central London – will they bounce back?

 

While house prices in central London’s prime property market face an ongoing struggle with less homes going on the market and asking prices being reduced, the issue is also feeding through to the lettings market.
[crb_image link=”https://www.buyassociation.co.uk/advice/property-investment-starter-course/” image=”https://cdn2.hubspot.net/hubfs/1717782/Asset_Store/WebCTA/cta.jpg” align=”left”]
According to Knight Frank’s latest research, rents in the prime central London area declined by 2.1% year-on-year in February, marking two full years of rental price falls in this sector. The same percentage drop in rents was seen in the year to January figures as well, although the agent does expect to see an uptick of 0.5% in prime central London rents in the year ahead.

The fall comes in spite of growing demand, with 17.6% more prospective tenants hoping to rent homes in the area in January, according to Knight Frank, while 6.4% less properties were advertised to rent in the year to January 2018 than the previous year. It is this increasing demand that could see rental values retain some of their strength in the coming months.

Testing times for prime London

A statement said: “The prolonged nature of the adjustment in prime London rents is due to the high levels of supply introduced to the market in recent years, including during the period following the introduction of an additional three per cent rate of stamp duty for landlords in April 2016.”

“As new supply moderates and demand strengthens, we expect to see continued upwards pressure on rental values.”

On the sales side, prime property in London has seen a rising discrepancy between original asking price and final selling price, with the average gap now reaching around 10%.

While the past decade has seen the capital’s rental prices soar more than most other parts of the country, the levelling off seen recently, particularly in the prime property market, spells a major change for the London property sector. Although demand in the capital will always be high, other regions such as the north-west and the midlands are taking off where London property has begun to stall, and are proving to be the next big property market hotspots.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

London prime

Rents continue to fall in prime central London – will they bounce back?

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.