A prominent prime central London agency chief is advising landlords to hold out for capital appreciation, which he says is long overdue and “could be around the corner.”

Liam Monaghan, managing director of London Central Portfolio admits that some landlords may be considering selling because of the Renters Rights Bill and tax clampdowns on private rentals.

But he says the prime central London market is stabilising and may possibly benefit from serving as a safe haven given the scale of global economic uncertainty. 

“Demand for UK property could increase, as a safe haven asset class which currently presents more security over other, more volatile, investments” he comments.

Average agreed rents on re-lets within the LCP rental portfolio increased by 1.72% in Q1 2025, more modest growth than seen in the final quarter of 2024. 

Values have been stabilising gradually over the last three years since the post-Covid spike in 2022, when growth reached 19.46%. Despite a slower rate of growth, rents in PCL are now 23.6% higher that they were in 2019, the last ‘normal’ year pre-Covid.

Rents agreed on renewals have also been stabilising, reflecting what Monaghan calls “the levelling out of the rental market after a period of unprecedented demand and unsustainable high rents.” 

Renewals in Q1 2025 saw average growth of 5.67%, a slight increase on the previous quarter but less than the same period last year, when they increased 7.27%.

The average length of tenancy reached an all-time high of 36.1 months in Q1 2025 – the longest on LCP’s records, reflecting the continued supply and demand imbalance in PCL. Limited stock available has encouraged tenants to extend their leases rather than re-entering the highly competitive rental market.

The time taken to let a vacant property was 21.4 days in Q1, the longest time Monaghan has seen since the first quarter of 2024, though still below the pre-pandemic average of c.28 days. Q1 is a seasonally quieter period in the rental market, so he expects to see vacant periods reducing over the course of year, as it did in 2024.

Tenants from the EU continued to make up the highest proportion of new tenants in Q1 at 47%, whereas UK tenants were down 13% compared to Q4 2024. North and South American tenants remained consistent with the previous quarter, however there were no new tenants from the Middle East, who usually represent a similar proportion.

He has seen a decrease in tenants in the Banking and Finance sectors in Q1, down 24% compared to Q4 2024. Tenants working in professional services were up to 18% from 7% in the previous quarter and tenants in retail services increased by 18%. Students continued to represent a significant proportion of new move-ins at 24%.