Rents in London’s prime property market rose again in August as market conditions in the capital improved to levels not seen for nearly two-and-a-half years.
According to Knight Frank’s latest prime London lettings report, rents increased for the third consecutive month, rising by 0.9% in the 12 months to August 2018, following a fall in the supply of rental homes as more landlords look to offload properties due to punitive tax changes.
The supply of rental properties has fallen in both prime central and outer London as more landlords sell or list their property for sale. There were 18% fewer listings in prime central London in the year to August compared to the previous 12 months. The equivalent decline in prime outer London was 13%.
But while supply falls, demand from renters is growing, with the number of new prospective tenants per new lettings listing hitting a ten-year high.
Knight Frank’s latest findings support separate figures released by other firms, including Home.co.uk.
The latest data from Home.co.uk shows that the number of available properties to rent is plummeting at an alarming rate, particularly in Greater London, and this is placing upward pressure on rents.
The property website reports that rents have already risen by 4% in the Greater London area over the last 12 months, with further growth anticipated as a result of the widening supply-demand imbalance in the private rental market in the capital.
Home.co.uk Director Doug Shephard commented: “The main driver for rent hikes going forward is an alarming lack of homes to rent, especially in Greater London.”