Posts with tag: prime central London rents

Rental values down year-on-year in Prime Central London

Published On: August 8, 2016 at 10:39 am

Tags: Brexit,prime central london,prime central London rents,rents

Prime central London rental values have slipped by 3.6% year-on-year to July, but activity in actually greater than last summer, according to latest figures.

A new report from international real estate firm Knight Frank shows that values were down due to increased stock levels and uncertainty surrounding Brexit.

Ups and downs

The number of tenancies agreed in the second quarter of the year actually increased by 3% in comparison to 2015. Viewings were also up by 15.8%.

However, the number of prospective new tenants fell by 6.8% in the same period, while rental yields remained flat at 3.1%.

Tom Bill, head of London residential research at Knight Frank, said that the Brexit vote had served to reinforce existing pricing trends.

Bill noted, ‘demand has been relatively flat since the start of the year due to uncertainty surrounding the state of the global economy, particularly in the financial services sector, which contributed towards a slowdown in rental value growth from its last peak of 4.2% in May 2015.’[1]

‘This trend has been compounded by higher levels of supply as stock has moved across from the sales market, with more vendors becoming landlords due to weaker conditions in the prime sales markets,’ he continued.[1]

Rental values down year-on-year in Prime Central London

Selective

Mr Bill observed that, ‘in the three months to the end of June this year, the number of new rental properties placed on the market rose by 49%, compared to the same period last year. As a result, landlords are reducing asking rents to prevent void periods and tenants are becoming more selective.’[1]

Properties where asking rents are seen as too high are struggling to receive viewings. Bill believes that the result of the referendum has highlighted this dynamic. Landlords are now taking a pragmatic approach to rents, with a background of rental uncertainty and increasing stock levels. Rental volumes are expected to increase into the Autumn.

‘The uncertainty ahead of the Brexit vote could be an explanatory factor for weaker registrations, although early signs are positive with no significant announcements that companies are pulling back from relocating staff to London following the referendum,’ Bill explained.[1]

Budgets

The investigation also found that relocation budgets have risen due to the effects of the falling Sterling price. This means tenants are searching in higher-value regions.

Indeed, the number of would-be tenants registering with Knight Frank with a budget of £1,500 per week rose by 11% in the three months to the 24^th July, in comparison to 2015.

Bill concluded by saying, ‘combined with the fact that rental values have been declining, it means tenants are widening their searches to higher value areas. For example, senior executives are increasingly able to rent in areas like Mayfair while some young professionals are looking in areas like Kensington rather than east London.’[1]

[1] http://www.propertywire.com/news/europe/prime-central-london-rents-2016080512232.html

PCL rents drop for first time in two years

Published On: February 17, 2016 at 2:12 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,Cluttons,landlords,London,prime central London rents,rents in London,tenants

The final quarter of 2015 saw rents drop in the capital for the first time in two years, according to a new report.

Cluttons estate agents has provided data suggesting that average Prime Central London rents dropped by 2% over the year to stand at £1,097 per week.

Falls

In addition, Cluttons claim rents are slipping faster than capital values, with average gross rental yields dropping to 3.16%. Despite this, the firm has reported an increase in buy-to-let activity in an attempt to beat the upcoming stamp duty surcharge.

Regions that have seen the most significant dips in rents include Notting Hill, where they slipped by 6.4%, Hollands Park (4.4%) and Marylebone (3.9%).

PCL rents slip for first two in two years

PCL rents slip for first time in two years

‘Landlords are growing wary of burgeoning supply levels at virtually every price point and are adjusting their rental incomes accordingly,’ said Faisal Durrani, head of research at Cluttons. ‘Furthermore, many tenants don’t realise they’re actually paying less than their predecessors in many cases. Some landlords are on the back foot and have been slow to adjust to the evolving conditions and are now undercutting one another to secure tenants,’ Durrani continued.[1]

Stamp Duty changes

James Hyman, Cluttons’ head of residential agency, noted, ‘in the lead up to any tax changes, there is always an increase in activity and the looming SDLT changes are no different, which we expect will become more evident in the coming weeks.’[2]

To this end, Cluttons has forecasted a reduction of the lettings market during 2016, but a growth of more than 16% before 2020.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/prime-central-london-rents-fall-for-the-first-time-since-2013

Rents Over £100 a Day in Prime Central London

Published On: July 1, 2015 at 12:00 pm

Author: Em Morley

Categories: Finance News

Tags: London rental property,prime central London rents,property in London,rental market London,renting in central London

Tenants in London’s prime central rental market are paying over £100 a day to rent a two-bedroom flat, revealed research from property investment firm London Central Portfolio (LCP).

Figures from LCP show that the average rent on a two-bedroom flat in upmarket neighbourhoods has reached £707 a week, with one-bedroom flats averaging £452 per week.

Rents Over £100 a Day in Prime Central London

In Knightsbridge, a typical two-bedroom flat costs £848 a week, and in Kensington and Notting Hill, the average rent on a similar property is £768 per week.

LCP found that one and two-bedroom flats in central London are popular with corporate tenants and international students, and this demand is fuelling rental growth. One-bedroom flats are the quickest to be let, with only 16 days between tenancies and two-bedroom apartments are empty for just 24 days.

Across both property sizes, LCP found that Mayfair is no longer the most expensive place to live, with the average rent cost falling by 14.85% annually to £678 per week.

Knightsbridge has recorded the greatest increase, with rents up 19.4% in the same period to £732 a week. Across prime central London, LCP revealed that rents have risen by 4.2% in the last year to £602 per week.

CEO of LCP, Naomi Heaton, explains: “The key dynamic in this marketplace remains location over size. The squeeze on rents during the credit crunch, as corporates underwent stringent belt tightening, has not relaxed, meaning smaller properties remain the most popular among corporate tenants. The huge influx of international students, often living on their own, adds to this demand.”

LCP also discovered that older properties experienced a 1.3% increase in rents, while newly refurbished homes saw prices rise more quickly.

Heaton continues: “There has been a paradigm shift among tenants who increasingly demand immaculately presented flats and service on tap.

“Landlords need to realise that tenants are looking for a complete lifestyle experience if they are to maximise yields and minimise voids.”¹

¹http://www.theguardian.com/money/2015/jun/29/prime-london-rents-100-pounds-a-day