There has been a significant increase in demand for rental accommodation in prime London, according to the latest report from Knight Frank.
The number of new prospective tenants increased by 22% in the year to July 2019 in prime central and prime outer London. Demand has been underpinned by uncertainty in the sales market.
Growth in demand was led by increases in north London and in the city fringe for homes up to £1,000pw.
Over the corresponding period, the number of new rental listings grew by just 1%.
This widening supply-demand imbalance will continue to exert upward pressure on rental values.
Rents are up 0.5% quarter-on-quarter in prime central London, while prime outer London has seen a quarterly rental value change of +0.2%.
Rental yields have increased in prime central London thanks to a combination of high demand for rental accommodation and lower average property sale prices.
Knight Frank also reports that the number of super-prime tenancies agreed in the second quarter of the year was 40, the highest figure for Q2 in more than five years.