Prime central London rental market see increased demand

Taylor Scott International News

Interest in the prime central London rental market has intensified in recent months as buyers become cautious prior to the election, and regulations surrounding mortgage lending take hold, a new report suggests. The proportion of those living in private rented accommodation has risen in recent years and this is partly a reflection on affordability, with rents increasing by just 1.4% when the effects of inflation are removed, according to the analysis from Kay & Co. It found that Bayswater and Marylebone offer family homes at significantly lower prices than other prime London locations and says that a family living in these areas could save over £44,000 a year on a 2,500 square foot home. Overall the prime central London lettings market experienced a relatively strong year in 2014. Annual growth in average rents returned to positive territory, recording the highest increase in rental values since 2010. However, the level of demand for rental properties was more subdued than in 2013 but there was certainly more interest in the latter half of the year. This could have been a result of households who were in the market to purchase a home awaiting the outcome of the general election and lenders becoming more cautious, the report explains. Weekly rents achieved averaged £882 per week across prime central London in 2014, an annual rise of 7% and, compared to the 2008 peak in the sales market, average weekly rents were 11.9% higher in 2014. The average weekly rent in the fourth quarter of 2014 had risen to £904 per week for prime central London. In comparison, the neighbourhoods of Bayswater and Marylebone offer more affordable rental stock within prime central London, with weekly rents in 2014 averaging £676 and £789 per week respectively. The performance of the lettings market in prime central London, including Bayswater and Marylebone, vastly outperformed Greater London as a whole in 2014. Average rental values across the capital registered 2.4% growth over the year based on the revised index of private housing rental prices by the Office of National Statistics. A breakdown of performance by property type in 2014 shows that flats performed better than houses across prime central London in 2014 in terms of rental growth. Average weekly rents for flats increased by 7.8%, compared to 5% for houses. The number of properties let in prime central London fell by 5.4% in 2014 compared to the previous year. A quarterly breakdown, however, reveals that it was the start of the year that saw considerable reductions in the volumes of properties let and this became less severe as the year progressed. By the fourth quarter of 2014, the annual change in the number of lets had increased by 6.7%. This coincided with increased uncertainty regarding the outlook for capital values in the prime central London sales market. There was also a simultaneous and continuous increase in average rents achieved each quarter in… Continue reading →

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