The dramatic slump in the prime central London sales market is now leading to a reduction in rents being achieved in the lettings sector too.
Yesterday we reported on Estate Agent Today that one agency claimed transactions were 60 per cent down from a year ago in some parts of prime central London - now another agency, Knight Frank, says the increase in supply of homes to let is pushing down rents.
“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. Higher supply is the result of increased uncertainty in the sales market, which has meant a growing number of vendors opting to let rather than sell until more clarity emerges surrounding future pricing trends” admits Tom Bill, head of London residential research at Knight Frank.
“Annual rental value growth declined to minus 5.2 per cent in November, which is the weakest it has been since December 2009. However, we forecast growth will ease to minus two per cent in prime central London West in 2017 and remain flat in prime central London East” he says.
The number of tenancies agreed in prime central London was higher in the three months to November than last year, despite a moderate slowdown ahead of the Christmas holiday period, the number of deals in the three-month period was a hefty 23.2 per cent higher than in 2015.