London rents fell in the final quarter of last year, according to the latest Foxtons letting report.
The fall was triggered by a flood of new rental homes coming on to the market and ongoing post-Brexit vote uncertainty, the agent said.
Despite rising stock levels, the company report that an increase in demand at the very end of the year compared to previous years meant that the ratio of renters per available property ended 2016 on a par historically. This was supported by upward movement in the number of renters from Western Europe, signalling recovering confidence in the capital’s potential in spite of external political influences.
Rising rental stock put some downward pressure on rents over the course of 2016, but small flats in Zones 1 and 2 were least affected while larger flats in the most central areas saw the greatest falls.
The report also shows that average rents in the capital continued to decline during the final quarter of the year. This impact was more prominently seen between Zones 3-6. However, gross yields remained largely consistent with the previous quarter.
Additionally, the publication of the housing white paper earlier this month bought with it encouragement for the private rental sector. It appears to offer greater security for renters with the promise of more long-term tenancy agreements.
Sarah Tonkinson, Foxtons PRS director, said: “We see the policies set out in the White Paper as a positive start to increasing availability of affordable homes and improved lettings conditions for renters.
“The developing Private Rented Sector will make a substantial net addition to London's rental stock and provide much-needed long-term tenancies with emphasis on providing high-quality service and accommodation, in line with the new White Paper guidelines.”
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