New figures from Knight Frank show that there has been an increase in rent prices in London’s prime property market. They have risen by 1.1% in the 12 months to September, which is thought to be down to people choosing the tenant lifestyle over that of a homeowner, amid Brexit uncertainty.
According to this latest prime London lettings report from Knight Frank, there is a higher demand for let properties, than there is supply. This could also be down to the fact that more landlords are looking to leave the market due to the recent hit of tax changes, however the overall outlook for landlords staying in the market appears to be positive.
However, there has been an increasing number of landlords putting properties up for sale, which has resulted in an overall decline in supply, therefore putting increasing pressure on rent prices.
Looking at separate data collected by Rightmove, we can see that lettings listings have dropped 7% in prime central London during the year to September 2018, in comparison with 12 months previous. In outer London, this decline was 10% for prime property. The result of this has been a growth to annual rental value in prime central London, as well as annual decline in prime outer London beginning to slow.
The annual change of a 1% decrease in prime outer London is the most moderate rate of decline seen in two and a half years. One recent change that could be influencing the situation is the tenant fees ban, which Knight Frank believes could prompt more landlords to reassess the strength of their portfolios, in order to prepare for a possible increase to administrative charges.
Although the UK faces many uncertainties in relation to political changes, combined with this declining level of supply, Knight Frank has seen 6% more new tenancies agreed in the year to September 2018 than it saw a year ago.