Knight Frank has given an end of year assessment of the prime London lettings and says rents in the enclave are in the black, after months of falls.,
Supply surged dramatically in the early months of this year thanks to the closure of the short-let staycation market due to Covid restrictions.
In February, the number of market appraisals for landlords, undertaken by Knight Frank, was 255 per cent higher than the same month in 2020. Yet by November, the increase had narrowed to 11 per cent with a large number of Airbnb-type properties back on the short-let market.
This precipitous drop in supply drove rents higher, with average rental values climbing 2.9 per cent in the year to December in prime central London; in prime outer London there was a 3.7 per cent rise.
These increases at the year-end compare to double-digit declines recorded just nine months ago. Indeed, the six-month increase of 8.2 per cent in prime central London in December is the highest recorded over an equivalent period since December 2010. A corresponding rise of 7.1 per cent in prime outer London was last exceeded in September 2007.
In the three months to November, the number of new prospective tenants increased by 28 per cent compared to the same period in 2020.
Meanwhile, the number of tenancies started was up by 16 per cet.
Tom Bill, head of UK residential research at Knight Frank comments: “Nine months ago, few would have predicted that rents would end the year in positive territory in the prime London lettings market. Thanks to a sharp retreat in supply and the physical re-opening of offices and Universities, that is precisely what happened.
“It would take more than a minor setback to put a meaningful dent in this rental recovery. It would require a rapid rewind to the start of this year, when the vaccination programme was in its infancy, staycations were banned, offices were firmly closed and all University lectures were online. More will become clear with the pandemic in the coming weeks.”
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