The lack of stock available to rent continues to limit lettings activity and drive rents higher in areas of prime London, according to property data experts LonRes.
New instructions of properties to let across prime London are 37 per cent lower than last year and 50 per cent lower than the pre-pandemic average of 2015 to 2019.
LonRes says this lack of new instructions continues to reduce the number of properties available to rent.
While demand for rental properties has bounced back over the last 12 months, the lack of stock is limiting the number of new lettings – down 60 per cent compared to last year and at similar levels to those seen during the first lockdown in 2020.
The lack of stock is continuing to drive rents higher, with annual growth at a remarkable 28.3 per cent: rents are now 5.6 per cent higher than their previous pre-pandemic high in 2018.
Commenting on the findings, LonRes managing director Anthony Payne says: “Both sale prices and rents continue to strengthen and over the longer-term transactions are also up - last month transactions were above the pre-pandemic average for April 2017-19. But the real story is all about houses vs flats.
“This is a trend that we have been reporting for some time, but the figures continue to make for interesting reading. Since April 2020, house [sale] prices across the three LonRes prime areas of London have risen by 6.1 per cent while the price for flats has fallen by 0.9 per cent.
“Anecdotally we’re hearing that it’s domestic buyers that continue to drive this market and they’re prepared to pay a premium to secure the house of their dreams. An example of this is a house in SW10 which was marketed last year but withdrawn after 40 viewings when the best offer received had been £3.85m. Marketed again at the end of March this year the house had 25 viewings in two days and after competitive bidding sold for £4.35m.
“While flats may be struggling in comparison, there are pockets of Prime London where flats and property as a whole, look relatively good value right now. International buyers have been scarce over recent years, and the markets in which theytraditionally buy - such as Knightsbridge and Chelsea – are some way off their pre-pandemic highs.”
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