STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

MPL
Supply-demand imbalance likely to tip PCL market ‘in the favour of landlords’

There are growing signs of recovery in the prime central London buy-to-let market as rental values dipped by just 0.1% in the three months to September, which was the smallest quarterly decline in almost two years.

A fall in residential letting stock in the heart of the capital is starting to place upward pressure on rental values, which are down 3% year-on-year - the most modest decline since June 2016, according to Knight Frank.

The report, which analyses the performance of single-unit rental properties in the second-hand prime central London market between £250 and £5,000-plus per week, found that the volume of properties coming onto the market between January and August was up just 2.2% year-on-year, compared to an equivalent jump of 33% between 2015 and 2016.

Higher supply in prime central London had been fuelled primarily by slower activity and pricing uncertainty in the sales market following a succession of tax changes, which meant more owners decided to let rather than sell.

But with the availability of rental homes now becoming more muted and demand rising, this trend has started to reverse as asking prices adjust and demand improves.

“The imbalance between new levels of supply and demand suggests the market balance is likely to tip back in the favour of landlords after a period when tenants have benefitted from higher supply levels and falling rental values,” said Tom Bill, head of London residential research.

While there are fewer buy-to-let mortgages issued in the UK than before a 3% stamp duty surcharge was introduced last year, Knight Frank data shows there was a 9.8% increase in the number of landlords who re-let their property in prime central London in the year to August 2017, which according to Bill underlines the fact “there has been no large-scale exit from the buy-to-let sector”.

imgcollapse
sign up