Average rents in prime central London declined 14.3 per cent in the year to March – but one agency reckons that may be good news.
That’s because the 14.3 per cent is only slightly wider than February’s 14.1 per cent – making it the smallest deterioration in rent averages at any time during the pandemic.
Knight Frank insists that a more significant shift took place in prime outer London. There, average annual rents were down 11.4 per cent in March – and that’s actually less than the average annual fall a month earlier.
“As the UK continues to unlock the economy and people take staycations, the flood of short-let properties that came onto the long-let market will begin to recede and rental value declines will eventually reverse” suggests Tom Bill, head of UK residential research at Knight Frank.
“Question marks remain around international travel, which affects the demand side of the equation, although rules should start to ease from next month.”
Demand grew faster than supply in prime central London last month – another good sign, says Knight Frank, as it was for the first time since November 2019.
The number of new prospective tenants increased 167 per cent in March compared to last year. Meanwhile market valuation appraisals rose 127 per cent over the same period.
The number of new tenancies remains strong: across London and the Home Counties combined this was 28.4 per cent higher in March than the same month in 2020.
“In many cases, tenants are taking advantage of falling rents to move somewhere that provides a better work/life balance, often re-locating to more central areas. The equivalent rise in the number of tenancies started in PCL was 30 per cent over the same time period” says the agency.
This post has originally been featured in Letting Agent Today.