Strutt & Parker says the take up of new rental tenancies in prime central London in the first quarter of this year was 11 per cent lower than in the same period of 2017 - and as a result the agency is revising its market forecast for 2018.
It now says that it anticipates letting prices in PCL to be flat in 2018 before returning to growth next year.
“Although tenant demand has not fallen significantly, the supply of turnkey lettings property has. Investors who turned to lettings 12 months ago are returning to the sales market, they have come to terms with more realistic pricing and are focused on a sale” explains Kate Eales, Strutts’ head of residential lettings.
“The reason this is not driving pricing up is because this is only one segment of the market, the older, tired rental stock will continue to sit on the market with longer voids and potentially lower rents. The tenants that are out there in the market are more discerning than ever and want the best on offer” she adds.