Rents in prime central London increased by 0.2% between February and March, the first monthly rise since September 2015, according to new industry analysis.
Average rents in the prime central London residential lettings market have now fallen by just 1.5% in the year to March 2018, the lowest rate of decline for almost two years, the latest report from Knight Frank shows.
The property firm is forecasting that average rental values in the prime central London market will edge higher this year as supply rebalances.
The supply of new lettings properties has declined over the last 12 months due to a combination of factors, as more landlords look to take advantage of increased signs of stability when it comes to pricing in the sales market and avoid a succession of tax changes in recent years, including a stamp duty surcharge and tighter restrictions around tax relief, by leaving the PRS.
The number of new lettings listings dropped 5% in the year to February compared to the previous 12-month period, LonRes data shows. It was the largest such decline since July 2015.
“Lettings properties accounted for 71% of all listings [sales and lettings combined] in prime central London in July 2017. By February of this year that number had declined to 62%,” said Tom Bill, head of London Residential Research.
Meanwhile, the number of new prospective tenants that registered in the year to February was 16% higher than the previous 12-month period, while number of viewings rose 14% over the corresponding period.
“Tenant demand continues to grow, suggesting continued upwards pressure on rents,” Bill added.