The rental market in prime central London is showing signs that it is potentially on the road to recovery, as reflected by the latest figures from Knight Frank which reveal that the pace of falling rental values in the area has slowed.
Average rents in prime central London dropped by 0.3% in May and is down by 4.8% compared to a year ago, which is an improvement on the 5.2% decline at the end of 2016, owed in part to the fact that new supply of rental stock coming to the market is slowing.
The improvement in the market at the lowest end of the market is owed to continued strong demand from young professionals, while at the high end of the market, above £2,000 per week, rental declines have slowed due to uncertainty surrounding the sales market in prime central London, which has pushed up demand for rental accommodation.
There was a 13% rise in the number of new tenants registering with Knight Frank between January and May when compared with the same period last year, while the volume of agreed tenancies have risen by 26% and viewings by 24% during the same period.
Meanwhile, there was a 6% fall in the number of new rental properties coming to market in prime central London during the first five months of the year when compared to the corresponding period last year.
“Relatively high stock levels have been a feature of the market since early 2015, as increased sales taxes and short term uncertainty over pricing in the sales market prompted many would-be vendors to become landlords,” said Tom Bill, head of London residential research at Knight Frank.