Rental values in London’s super prime rental market dropped by 0.5% in the year to July on the back of a rise in the supply of rental properties available in the higher price brackets, as some landlords who listed their property for sale in response to tax changes have returned to the rental market after failing to achieve their asking price.
The ratio of new prospective tenants to new lettings listings rose to 6.8 in the second quarter of 2019. The figure was the highest it has been in more than 10 years and suggests rental values are unlikely to decline by any meaningful amount in the short-term.
Rental demand in the prime London lettings markets continues to grow due to the tenant fee ban, introduced in June, and as some buyers hesitate, choosing to rent, amid political turmoil.
The number of new prospective tenants registering rose by 16.4% in the year to June while the number of tenancies agreed increased by 18.4%.
Rental yields on prime central London property have widened in response to stronger rental values and declining prices.
The difference between the prime central London gross yield and the benchmark 10-year UK government bond was about 245 basis points in June, the widest it has been in more than 15 years.