The latest lettings market snapshot from the Royal Institution of Chartered Surveyors suggests the vast majority of respondents expect rents in London to fall in 2021.
The snapshot always majors on the sales market but on the rental side it notes that tenant demand remains almost unchanged since November.
The RICS survey is based on sentiment and it says that rental growth expectations remain slightly positive, with most parts of the UK anticipated to see an increase.
However, for the third consecutive month, a net balance of in excess of 60 per cent of respondents expect rents to fall in London over the coming three months – “making the capital city a clear exception to the rest of the UK” says the institution.
New figures from Knight Frank appear to back the RICS view.
The agency says the decline in average rents in prime central London was 10.5 per cent in the year to November, while in prime outer London the fall was 9.0 per cent.
It adds that the declines are at their least in south-west London, where supply has not built up to the same degree - even so it admits that in Wimbledon the annual decline recorded in November was 3.3 per cent, hit 5.4 per cent in Richmond and 5.6 per cent in Belsize Park.
“In more central areas, the combination of a glut of former short-let properties and weaker demand has driven rents lower. In addition demand from international students and corporate tenants has been weaker since the pandemic. However, the rollout of the vaccination programme may see both travel restrictions ease and sentiment improve among international students, which could have a marked impact on demand in prime London lettings markets in 2021” says Knight Frank research guru Tom Bill.
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