Prime central London rental market set for a boost in 2015

Taylor Scott International News

Rental prices in the prime central London property market are set to grow 2.5% this year with the overall sector remaining robust despite uncertainty in the sales market, it is claimed. The latest data from Strutt & Parker and its retained economic advisors Volterra, show that there were 2,093 lets agreed in the sector in the final quarter of 2014, which although 18% below the five year quarterly average, is far above the level of lets seen in the 2007 peak. ‘In 2015, we hope to see a boost of activity levels and slow but steady growth in prime London lettings. The rental market is calling out for an injection of fresh stock which has started to come to the market, in particular refurbished lateral apartments,’ said Zoë Rose, head of London lettings at Strutt & Parker. ‘As investors continue to convert their assets into properties, we anticipate supply easing, with more properties coming to the rental market and the early signs are that this is already happening. We believe that this trend will continue all year as prime property owners place greater focus towards the rental option,’ she explained. She pointed that rentals were often seen as the last choice, simply a back-up option, which is why there was such a shortage of prime rental stock that came to the market last year. The next few months will determine whether this change is set to continue, with the bonus of giving the niche tenant greater choice in this elite rental sector of the market. She added that there were 12,000 rental transactions in prime central London in 2014, up from just over 10,000 five years ago. ‘So the market is in good shape when you look at historic figures. The number of people out there that enjoy the flexibility of renting at the high end definitely seems to be growing,’ she said. In the sales market, headwinds look set to continue into the first half of 2015, according to the firm. Whilst UK assets remain an attractive position at present, and this looks set to continue as the UK economy continues to grow, uncertainty over taxation change due to the looming election are placing considerable uncertainty on this market. ‘The prime central London sales market is feeling the full impact of buyer caution ahead of the Election, with the strongest activity at the very top end of the market above £5 million and at the other end below £2 million, where the financial impact of a potential mansion tax is less relevant, or indeed irrelevant,’ said Andrew Scott, head of London residential at Strutt & Parker. Continue reading →

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