Rents in London’s prime property market have moved into positive territory for the first time since January 2016, increasing by 0.8% in the 12 months to June 2018, Knight Frank’s latest index data reveals.
The figures show that rental values have strengthened as supply levels have dropped, which has happened as more landlords have listed their properties for sale following recent tax changes in the PRS and as sales pricing appears to bottom out.
Knight Frank reports that there is a widening supply-demand imbalance in the sector as reflected by the ratio between the number of new prospective tenants and the number of new lettings listings, which rose to 4.6 in May – the highest figure in more than ten years.
According to the property firm, fewer landlords are registering as new prospective buyers in prime central and outer London.
Following a series of recent tax changes, BTL landlords accounted for 13% of new prospective buyers in May 2018 compared to 20% in May 2014.
The research also found that the number of properties listed for rent in prime outer London in the year to May 2018 was 14% lower than the previous 12-month period, as more property owners attempt to offload their property following tax changes that have affected landlords, which is putting upwards pressure on rental values.