Prime Central London’s lettings market has improved gradually during the first two quarters of the year according to JLL.

It says transaction levels increased three per cent in Q1 and by a further one per cent in Q2, boosting the annual total to over 9,670 – the highest in almost three years. 

The activity recovery has been led by the more robust lower-end of the market, says the agency, with lettings in the sub-£500 per week market – which accounts for around 30 per cent of all PCL transactions – up 16 per cent in the year to Q2 2017. 

By contrast, the volume of new tenancies agreed in higher price brackets was just 1.9 per cent in the same period. 

However, despite a slight rise in tenant demand, oversupply of property on the market has led to further rental value falls during Q2.  

Price falls for rentals below £1,000 per week have averaged 0.9 per cent during Q2; the upper-end of the market has seen rents fallen around 10 per cent in the year to Q2 2017. 

JLL says subdued turnover over the past two years, weaker demand and several owners renting out their property having been unable or unwilling to sell have all contributed to raised supply levels. 

“Furthermore, tenants are bargaining with the choice available to them. The gradual increase in transactions witnessed during the course of the past two quarters will help to lower available supply in the coming quarters, but the very steady increase will take some time to have a meaningful impact” the agency warns.