Average rents in prime central London fell 13 per cent in the year to January as over-supply still dominated the market, according to Knight Frank.
It’s almost as bad in prime areas of outer London where rents fell 10.7 per in the same period.
The agency says a high number of properties switching from the short-let market has been a feature of the lettings market in the capital since the start of the pandemic and restrictions on the tourist trade, which have been exacerbated during moments of tighter lockdown restrictions.
The agency also reports that the number of valuation appraisals for the lettings market rose 63 per cent against the five-year average in January, highlighting how supply levels continue to rise.
Meanwhile, the number of tenancies started in January was 19 per cent ahead of the five-year average in London: Knight Frank says this underlines how activity levels remain strong despite falling rents.
The growth in supply continues to put pressure on rents admits David Mumby, head of prime central London lettings at Knight Frank.
“Rents have undergone a fundamental reset. Rents are falling and I think the trend will continue until the airports re-open and we see the return of international travel. We are not being inundated with new stock at the same rate as last year, but supply levels are still high.”