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TODAY'S OTHER NEWS

Weaker demand as the rental market in prime London remains subdued

Rental market activity in prime London markets has been lower than normal this summer due to uncertainty around the start of the academic year and pressure on corporate budgets, according to Knight Frank. 

The company’s prime London letting report shows that rental value declines have narrowed in the capital's markets in recent months but weaker demand means there will be no spike in activity this summer.

Average rental values in prime central London dropped 0.9% in July, which was an improvement on the 2.2% decline recorded during the depths of the market lockdown in April.

Similarly, in prime outer London, a fall of 0.4% in July compared to a fall of 2.6% in April.

Rental values have fallen in recent months as this uptick in supply has been compounded by weaker than normal demand.

“Summer is normally the busiest time of year for the London lettings market,” said Tom Bill, head of UK residential research at Knight Frank. “This year will be different as fewer students face a hard September deadline and as companies tighten their belts until the economic fallout from the pandemic becomes clearer.”

In the 12 months to July, average rental values in prime central London declined 5.8%, while in prime outer London the decrease was 5.4%. In both cases, it was the largest annual decline registered since the global financial crisis in 2009.

The weakest-performing section of the central London market has been between £1,000 and £1,500 per week, where corporate demand is traditionally stronger. There was a fall of 4.8% over the last three months in that price bracket compared to an overall fall of 3.4%.

The south-west was the strongest performing area in outer London as it benefitted from growing demand for outdoor space. Average rental values in south-west London fell 1.4% in the three months to July compared to an overall fall of 2.3% over the same period in prime outer London. 

Demand is still rising, although the focus is on sub-£1,000 per week properties and areas with more green space.

Across London and the Home Counties, the number of new prospective tenants that registered in the week to 1 August was 56% higher than the five-year average. Meanwhile, viewings were 36% higher over the same period.

Poll: Do you own property in London?

PLACE YOUR VOTE BELOW

  • icon

    Who wants to live in London ? not me that's for sure.

  • Suzy OShea

    Many people still want to live in central London Andrew Townshend if it means they can walk or cycle to work when offices reopen.

  • Mark Wilson

    A great city under pressure.

  • Paul Barrett

    Nobody cares about London.
    It is another country populated by those with vast amounts of money.

    As such they have little relationship with normal people.

    WFH has now revealed that London isn't really needed.

    It is an analogue city in a digital world.
    It's main industry is built on millions of commuters coming and going from London.

    WFH has made this unnecessary to the extent it has been.

    London property prices have been built on this necessity.

    London wealth will now spread fingerlike to those properties with good size bedrooms and large gardens.

    WFH has revealed there is now no need to live that close to London.

    The commuter worker bees no longer have to attend a central hive.
    They can now carry out their necessary work as solitary bees working away in far pleasanter surroundings than sweaty old London.

    The London commuter economy has been undone by CV19.
    It will not return.

    Commuters will save millions of pounds in commuting costs.
    It will result in rail nationalisation as there will be too little income to be a viable business.
    It will need to return to being a vital not for profit public service paid for by public subsidy.

    The same with buses
    There will be much reduced movement of people on a daily basis.
    Good news for them not so for those whose livelihoods depend on such movement.

    All that is happening really is people will return to pre-industrial age living.

    Far better lifestyle

    icon

    I agree with you paul and I look forward to it

     
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