Rents in prime locations of the Home Counties fell by an average of 0.8% last year, according to the latest Knight Frank rental index.
This fall has been attributed to a higher number of homes available at the top-end of the market pushing down prices.
The rise in the volume of properties available in higher price brackets was primarily driven by larger uncertainty in the sales market after a number of tax alterations during 2016.
In the final quarter of 2016, prime rents in the Home Counties fell at twice the annual rate at 1.6%. Additionally, Knight Frank was instructed to let 39% more properties during the same quarter. Market appraisals also increased by 45% in the same period.
As such, Knight Frank feel that the market remains favourable to tenants, particularly those living in regions with high price brackets. Landlords in these areas have to be flexible in regards to asking rents, to try and stay competitive and keep void periods down.
Prime rental values fall in Home Counties during 2016
Jemma Scott, partner at Knight Frank, said: ‘The latest figures show that the rental market in the Home Counties is equally affected by the global markets as prime central London, which is reflected in the marginal decline in rents.’
‘However, the surge in activity in the last quarter of 2016 and the significant increase in new tenant registrations suggest that the gap between available stock and tenant demand is closing, so our outlook for 2017 is very positive,’ she continued.
The number of viewings actually rose by 17% in the same period compared to 2015, with the volume of would-be tenants also rising by 28%. Knight Frank agents attribute this demand mostly under the £4,000pcm price bracket. These properties usually sell quicker than those in higher brackets, driven by an increase in corporate enquiries from executives moving to the Home Counties for work.
‘Already in the first week of trading for 2017, the sub £4,000 per month market remains busy and we have seen an encouraging number of international corporate enquiries as families and businesses plan for relocation to the UK,’ Scott concluded.