Rents up and tenants competing for properties in London

The LonRes data consultancy says the lettings market in prime areas of the capital is now characterised by increasing rents and competition amongst tenants for properties.

LonRes says there’s been a 1.8 per cent rise in achieved rents across all prime areas in the third quarter of this year compared to the same period of 2017; prime central London saw a 2.6 per cent rise while prime fringe areas enjoyed a 4.5 per cent hike.

This was helped by discounts and price reductions being at their lowest for three years according to the consultancy.

Tenants negotiated an average of 4.6 per cent off initial asking prices in the third quarter of this year compared to 6.5 per cent in Q1 2018; just under a third of properties had a price reduction before securing a tenant compared to 40 per cent in Q1 2018.

However, over the third quarter of this year LonRes recorded 12 per cent fewer new lets agreed than over the same part of 2017.

Over Q3 2018 new lets agreed fell 17.6 per cent compared to Q3 2017.

Letting agents in the capital remain optimistic – 68 per cent of respondents to the LonRes Agent Survey expected rents to be the same or higher by this point next year.

This contrasts sharply with yesterday’s LonRes survey results for the sales sector, which showed the market hit badly by Brexit uncertainty.