UK Property - Prime London Lettings Report for January 2021
Prime central London lettings index: 144.2
Prime outer London sales index: 153.2
Average rents in prime central London fell 13% in the year to January as supply levels remained high during the third UK national lockdown.
A high number of properties switching from the short-let market has been a feature of the lettings market in the capital since the pandemic, which has been exacerbated during moments of tighter lockdown restrictions.
The trend was less marked in prime outer London, where rents fell by 10.7% in the year to January. The declines have been smaller in some leafier parts of London, where the supply of lettings property has been kept in check by a relatively buoyant sales market.
In Wimbledon the annual decline was 2.5%, while it was 4.3% in Hampstead and 6.3% in Belsize Park.
The number of market valuation appraisals for the lettings market rose by 63% versus the five-year average in January, highlighting how supply levels continue to rise.
Meanwhile, the number of tenancies started in January was 19% ahead of the five-year average in London, underlining how activity levels remain strong despite falling rents.
In many cases tenants are taking advantage of falling rents to relocate to new parts of the capital. It was a trend we analysed taking place in Canary Wharf.
The growth in supply continues to put pressure on asking rents said David Mumby, head of Prime Central London lettings at Knight Frank.
“Prime London rents have undergone a fundamental reset,” said David. “Rents are falling and I think the trend will continue until the airports re-open and we see the return of international travel. We are not being inundated with new stock at the same rate as last year, but supply levels are still high.”
The last time annual rental declines were as big was in 2009 during the global financial crisis. Average rents in PCL fell 17.8% in the year to September 2009.
Courtesy: Knight Frank
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