Prime rents in the Home Counties dropped by an average of 0.8% last year, as a higher number of homes available at the top end of the market pushed down prices, the latest Knight Frank rental index shows.
The hike in the volume of homes available in higher price brackets was driven largely by greater uncertainty in the sales market following a series of tax changes, including higher stamp duty charges.
In Q4 2016, prime rents fell at twice the annual rate, at 1.6%. Knight Frank was instructed to let 39% more properties in the same quarter and the number of market appraisals also rose 45% over the corresponding period.
Consequently, it remains a tenants’ market, particularly in higher price brackets, with landlords having to be flexible with regards to asking rents in order to remain competitive and keep void periods to a minimum.
“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,” said Jemma Scott, partner at Knight Frank.
“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.”
The number of viewings rose 17% over the same time compared with 2015, while the volume of new prospective tenants increased by 28%.
Agents at Knight Frank note that much of this demand was concentrated in the sub-£4,000pcm price bracket with such properties often letting faster than those in higher price brackets, boosted by an increase in corporate enquiries from company 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 added.