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Rental yields in prime central London hit six-year high

The average rental yield achieved in prime central London in December was 3.35% - the highest level seen since April 2012 as a result of rising rents and downwards pressure on prices, said Knight Frank, in its latest monthly report.

The property firm reports that letting activity across prime London markets has been resilient despite the current uncertain political backdrop, with the number of new tenancies in November increasing by 12.3% in comparison to the corresponding period last year.

Knight Frank reports that average rental values in prime central London increased by an average of 1.1% in December in response to falling levels of supply, prompted by landlords seeking to sell their properties in response to recent tax reforms.

But while supply continues to fall, the number of new prospective tenants registering in prime central London has been on an upwards trajectory since the start of the year, suggesting that rents will rise further in 2019.

There has been similar upwards pressure on yields in prime outer London as rental value declines bottom out. An average gross yield of 3.5% in December was the highest recorded since March 2015.


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