Typical rental values in the prime central London letting market were unchanged during July, ending a series of monthly falls that began in October 2015.
Figures from the Knight Frank central London lettings index also reveal that annual rental growth has risen slightly to -3.7%. This was the first time this year that it has gone below -4%.
What’s more, the decline of 0.4% in the three months to July was also the lowest three-month fall seen since October 2015.
Stock
In addition, the Index shows that rental values in the sector have slipped since the end of 2015 as a result of greater stock levels. This means that the market is turning slightly in favour of tenants.
Tom Bill, head of residential research at Knight Frank, observed: ‘More property came onto the lettings market as a result of uncertainty over the short term trajectory of price growth in the sales market following successive tax hikes. Tax changes affecting landlords appear to be one reason the market balance appears to be tipping back the other way.’[1]
Mr Bill went on to note that cuts on mortgage interest tax relief and the 3% stamp duty surcharge are just two of the reasons that some landlords are reassessing their portfolios. UK finance has also revised its predictions for buy-to-let lending in 2018 by 13%, from £33bn to £38bn.
Monthly falls in average rents in PCL finishes
Flat
‘Prices are likely to be flat this year after a 6.3% price decline in 2016 and transaction volumes are rising. Accordingly, there was a 6.4% decline in the number of new lettings properties on the market in prime central London in the first six months of 2017 compared to last year,’ Bill said. [1]
What’s more, the Index shows that demand indicators are increasing, which are again supporting rental values. The number of new tenancies agreed in the opening six months of the year was 28.2% greater than in 2016, with the number of new prospective tenants registering with the firm up by 14.7%.
The number of viewings was also up by 23.1%.
[1] http://www.propertywire.com/news/uk/monthly-decline-average-rents-prime-central-london-lettings-market-halts/