Demand for rental properties in prime central London has increased in recent months as would-be buyers become cautious prior to the EU referendum, a new report suggests.
Many landlords in prime central London are seeing greater demand for rental properties as more would-be buyers adopt a ‘wait and see’ policy until the uncertainly around the EU referendum is over, according to independent property buying agency, Black Brick.
“We are seeing a greater interest in renting in prime central London, as would-be buyers wait out the current uncertainties before committing to buy,” said Camilla Dell, managing partner of Black Brick.
Rents in the heart of the capital have been rising fastest for smaller units, according to Dell.
She added: “The good news for prospective tenants of larger prime central London properties is that rents have not been rising to the degree seen in other parts of London’s rental market. According to figures from Savills, rents for five bedroom and larger properties actually fell by 0.7% last year, while rents on four bedroom properties rose just 0.1%.”
Black Brick’s report contrasts with the latest report from specialist residential investor advisors London Central Portfolio (LCP).
LCP said last week that the private rented market in prime central London was weakening as tenants capitalise on the existing economic uncertainty ahead of the looming EU vote.
The analysis shows that the market is starting to subdue, with new lets achieving a price rise of just 0.3% over the last quarter, while re-lets saw a 1.2% decline in rents during the same period.
“The overall suppression in rents reflects a market dynamic which was conspicuous during the credit crunch, as tenants capitalise on economic uncertainty to leverage up their bargaining power. This has been compounded by companies cutting their relocation budgets in the face of global instability and, in some cases, delaying relocations in the run up the EU referendum,” said Naomi Heaton, chief executive officer of London Central Portfolio.
“In light of the current market conditions, landlords may need to be more flexible to accommodate the higher negotiating power of applicants and to prevent void periods which may erode any increase in rent ultimately achieved,” she added.