Knight Frank says the steep increases in rents seen in prime London recently are now calming down.
Rental values hit their low point in the first half of 2021 as the market was flooded with short-let properties due to staycation restrictions.
After reaching a peak in April, annual increases in June narrowed to 26.8 per cent in prime central London and 21 per cent in prime outer London.
Over the first six months of the year, rents rose 8.4 per cent in PCL and 7.4 per cent in POL, underlining how a large part of this annual increase took place in the second half of 2021.
The agency says supply is now picking up modestly in pockets of London but not to the extent that it is anything other than a landlord’s market.
More ‘accidental landlords’ are coming from the sales market as mortgage rates rise and prices peak. Meanwhile, there is a greater churn of lettings properties as tenants reassess their work/life balance and others move due to fast-rising rents.
As a result, the agent adds, the ratio of new prospective tenants to market valuation appraisals fell to 4.7 in June, which is lower than it was last summer.