High-end agency Chesterton Humberts predicts prime central London rents are expected to grow by two per cent this year, even though stock fell sharply during the later stages of 2013.
The firm says tenant demand for its properties increased significantly, up 8.6 per cent on a year ago, but that stock was down 14.4 per cent.
Nicholas Barnes, the firm’s research head, says demand from tenants will be sustained over the short term at least because of the continued high levels of deposits required before mortgages are granted to first time buyers, and the predicted increase in capital values within London.
But Barnes issues a warning to landlords not to be greedy. “Landlords will still need to offer competitive rents in order to avoid the expense of lengthy void periods” he says.
This is the latest in a spate of forecasts predicting increased prime central London rents. Boutique agency W A Ellis forecasts a three per cent rise in 2014, mostly on the back of increasing numbers of financial services staff being recruited in the City.