Prime London rental market sees rent surge

Prime London rental market sees rent surge

0:01 AM, 26th September 2024, About 2 weeks ago 2

Text Size

Rents in London’s prime rental market have been rising, with an annual growth of 2.6% in August.

According to LonRes, average rents in prime London areas, including Westminster, are now 31.6% higher than they were between 2017 and 2019.

However, the number of new lettings agreed has dropped by 14.5%, while new instructions have decreased by 7.7%.

Summer slowdown

Across prime London, the stock of available homes to let had been recovering from the low of late 2021, but this stalled somewhat in August with a fall compared to a month earlier.

Across prime London there were 6.0% more homes on the market at the end of August than a year earlier, but 50.2% fewer than five years ago.

In the prime London housing market, transaction levels fell in August, with sales activity lower than usual for the time of year.

Although summer is often slow, activity was lower than typical for the time of year, a contrast to the growth seen in July.

August saw 7.5% fewer sales transactions than a year earlier, which was 3.3% lower than the 2017-2019.

Autumn is typically a more active time

Nick Gregori, head of research, LonRes says the autumn should provide a boost to the property market.

He said: “Even by usual summer holiday standards August was a quiet month for the prime London sales market. This continues an unsettled few months, with a subdued market pre-election in June followed by a strong bounce back in July.

“Looking at the data for summer as a whole is more positive, with activity similar to last year and ahead of the longer-term average. Autumn is typically a more active time of year and we expect to see the usual jump in instructions in September, but the key question is whether demand will pick up too.

“If the July boost can be attributed to a new government ‘honeymoon period’, that already seems to be over. The PM and Chancellor are trying to find a balance between being too negative about the state of the economy and making their case for spending cuts and tax rises. Either way, it is not the best for improving sentiment in the housing market.

“There is a danger that both buyers and sellers move back to a pattern of ‘wait and see’ ahead of the Budget and potential further interest rate cuts.”

The market for properties priced at £5m or more has been the weakest segment this year, perhaps most affected by political uncertainty. Transactions in August were down 47.2% on the same month a year earlier.


Share This Article


Comments

havens havens

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

11:58 AM, 26th September 2024, About 2 weeks ago

The rising rents in London’s prime market show demand remains strong, but the decline in new lettings and transactions signals some underlying concerns. It’s concerning that the higher end of the market, especially properties over £5m, is struggling due to political uncertainty. As a property investor, I believe we need to keep an eye on how the autumn market unfolds; if demand doesn’t pick up, we might see further shifts in the landscape that could present both challenges and opportunities for savvy landlords.

Rod

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

15:14 PM, 26th September 2024, About 2 weeks ago

Reply to the comment left by havens havens at 26/09/2024 - 11:58
Prime central London property prices have barely risen since 2015 due to a combination of factors including BREXIT (visas), the great pandemic move to the country, WFH, slow return of Chinese and sanctions on Russians to name the obvious ones.

This lack of capital growth and the dip in rents during the pandemic, along with rising taxes, interest rates and licencing schemes has driven the recent rent rises.

As the Government seek to push through the Renters Rights Bill, while threatening to raise taxes such as CGT, it would be surprising if landlords - central London and beyond - do not vote with their feet and decide to sell all but their best performing properties and invest the proceeds for better returns in more liquid assets.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More