Prime London rents 'to rise 2.5% in 2015'

High end agent Strutt & Parker says prime central London rents will rise 2.5 per cent this year despite uncertainty in the sales market across the capital because of the general election and possible porperty taxes.

The agency's latest figures show that there were 2,093 lets agreed in its definition of prime London - Knightsbridge, Belgravia, Chelsea, South Kensington, Fulham, West Chelsea, Kensington and Notting Hill - in the final quarter of 2014.

This was a mixed result - some 18 per cent below the five year quarterly average yet substantially higher than the level of lets seen back in 2007, when the sales market peaked before the downturn.

As investors continue to convert their assets into properties, we anticipate supply easing, with more properties coming to the rental market - and the early signs are that this is already happening says Zoe Rose, Strutts' head of London lettings.

There were 12,000 rental transactions in prime central London in 2014, up from just over 10,000 five years ago she says.

However, the agency is substantially more pessimistic about prime central London sales, especially this side of the summer.

The PCL sales market is feeling the full impact of buyer caution ahead of the election with the strongest activity at the very top end of the market above £5m and at the other end, below £2m, where the financial impact of [a possible] mansion tax is less relevant says Andrew Scott, Strutts' head of London residential.