Rental prices continued to fall across prime central London during the fourth quarter of last year, but values are expected to remain stable during 2017 before pushing higher from 2018, according to JLL.
The company’s latest prime central London report shows that rental values fell by 3.1% in Q4 2016, marking the fourth consecutive quarterly fall, which left rental values 8.6% lower during the course of 2016.
The 3.1% decline in the final quarter was greater than the 1.9% and 2.3% declines witnessed in Q2 and Q3 respectively, but importantly JLL do not expect the trend of escalating falls to continue.
The firm forecast that rental values in prime central London will remain stable during 2017 before pushing higher from 2018, owed in part to higher underlying consumer price inflation.
Lucy Morton, head of Agency at JLL, commented: “Demand and activity remained robust during the second half of 2016. Importantly, the imbalance between supply and demand was corrected by the end of the year with much of the excess stock soaked up.
“There continues to be strong demand for apartments in new developments as tenants buy into the lifestyle of concierge, gyms, business facilities and smart living with easy access to the city.
“Overall, fewer overseas families moved to London with companies in 2016 compared with previous years as organisations preferred to house their senior directors in high-end one and two bedroom apartments to use more as a pied-à-terre while leaving their families at home.
“There was another year-on-year increase in demand from high net worth international students last year and we anticipate this will increase again during 2017.”