Rents in prime central London are rising again after a prolonged period of stagnation, according to property advisers London Central Portfolio.
“The key dynamic in this marketplace remains ‘location over size’”, explains Naomi Heaton, chief executive of LCP.
“The squeeze on rents during the credit crunch as corporates underwent stringent belt tightening has not relaxed, meaning that smaller properties remain the most popular amongst corporate tenants. The huge influx of international students, often living on their own, adds to this demand. Around 80 per cent of properties rented in prime central London are one or two bedroom units” says Heaton.
LCP says one bedroom apartments in PCL remain the most attractive to tenants with the average turnaround time between tenancies decreasing to just 16 days, compared with 24 days for two bedroom properties. For all PCL properties, void periods have fallen to an average of 20 days, representing a 13 per cent decrease from 2013-14.
The most internationally popular areas have come out on top in terms of highest weekly rents.
Landlords in South Kensington, a favourite of French tenants fleeing France’s high taxes, now receive over £100 a day in rent for the smallest flats. The area is clocking up an average of £747 a week, more than the average salary in the UK according to Heaton.
However, last year’s most expensive area, Mayfair, has seen the largest fall, down 14.8 per cent to £678 a week.
The most affordable areas to rent in PCL remain north and south east of Hyde Park, with Bayswater and Paddington demanding the lowest average weekly rent of £538 a week. Pimlico which has lagged behind in recent years, surged ahead with rental increases of nearly nine per cent to £560.
“As the centre of gravity in PCL moves to the less traditional areas benefiting from good transport links and architectural heritage, the rapid increases in sales values have not been reflected in rents. As gentrification continues, rents are now playing catch-up. The smart buy-to-let investor will look away from PCL’s better known locations to central areas where there is still room for both prices and rents to go up” Heaton adds.