Rental values in prime London increased by 2.5% in the final quarter of 2017, up 1.2% on the corresponding period in 2016, led by gains in prime central London, new figures show.
The newly released LonRes Prime London Lettings Index reveals that rents rose 6.3% in Q4 2017, compared to 3% in Q4 2016), owed in part to a supply-demand imbalance in the market.
Both prime central London and prime London saw fewer properties come to the market in Q4 2017, falling by 8% and 19% respectively, contributing to the growth in rental values.
In contrast, rents fell in prime fringe parts of the capital, which includes postcodes such as SE1, SE11, SW4, SW5, SW6, SW11, W4, W6, W9, W10, and this may coincide with the fact that this was the only region monitored by LonRes to see an increase in new instructions, up 8% on Q4 2016.
Overall, the number of properties let across the LonRes three prime areas rose by 7% over 2017 compared to 2016.
While fewer properties were let over Q4 2017, 5% fewer than in Q4 2016, the number of homes let at the top-end (£3,000 plus a week) increased by 24% year-on-year.
Marcus Dixon, Head of Research, LonRes, said: “A combination of fewer homes [to rent] reaching the market and increased demand, particularly at the upper end, meant achieved rents rose by 3% across prime central London in the fourth quarter compared with the same period a year earlier.
“The [rental] market remains sensitive to levels of new supply, but has continued to benefit from would-be owner-occupiers deciding to rent instead.”
You can read the latest LonRes residential review by simply clicking here.