Up, Up and UP AGAIN - prime London rents soar once mo...

There are no signs of rental growth slowing in prime London lettings market, says LonRes.

The property data firm says annual rental growth in August was 8.8 per cent across prime London.

This figure took rents to 29.3 per cent above their 2017-19 pre-pandemic average.

All areas and sub-markets have seen similar levels of growth but prime fringe was the best performer for the sixth month in a row, recording an annual rise of 12.4 per cent.

Demand remains strong, with a significant proportion of properties being let without listing, meaning they are not captured in the data. However, even with that caveat there are signs that supply is creeping up from these recent lows, with new instructions rising by 6.5 per cent in August compared to a year earlier.

Lets agreed fell by 21.3 per cent on the same basis, and are almost 60 per cent lower than the levels recorded in 2017-2019.

With the activity metrics impacted by a lack of listings, the data on discounts and reductions may be a better indicator of demand.

Average discounts across prime London were typically around six to 10 per cent from 2013 to early 2020. After rising in the early stages of the pandemic they fell sharply through 2021 and in late-2022 properties were even reaching more than 100 per cent of asking price on average in some months.

While the market appeared to cool slightly on this measure in the first half of 2023 the latest data shows discounts falling again. The prime fringe market looks particularly strong, with average discounts of 0.5 per cent in August.