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Prime London Rents Stable - A Return to Growth?

By +Eric Jafari

Prime London Rents StableRents for prime property in central London remained unchanged in May, according to data from Knight Frank.

However, far from being a sign of stability, there is talk that the data could indicate a return to growth. While the prime market has generally been on a downward trajectory over the last 12 months, Liam Bailey, global head of Knight Frank Residential Research, thinks May's figures paint a much healthier picture.

The fall in annual rents is now at 2.9 per cent and the poor financial sector employment market has been to blame for the decline. Morgan McKinley's London Employment Monitor showed job vacancies in the City were 22 per cent lower in April than the same time last year. "While the financial sector still has hurdles to overcome, activity levels in London's luxury rental market suggest that here a healthier picture is emerging," Mr Bailey explained. "The number of new tenancies agreed in prime central London is up by 39 per cent so far this year compared to the first five months of 2012. Additionally, the number of new applicants is up so far this year, by 14 per cent."

The ratio between prospective tenant registrations and newly available properties has widened to 3.8 from three in the first four months of 2012. There are also pockets of rent growth in prime central London and in St Johns Wood, rents increased by 1.4 per cent. Kensington also saw 0.1 per cent price growth during May. Mr Bailey explained that in the year to date, rents in Kensington and Marylebone increased by 2.6 per cent and 1.9 per cent respectively.

Belgravia and Knightsbridge also saw growth of 0.3 per cent and 0.2 per cent respectively, reflecting the beginning of upward momentum. Knight Frank believe that the positive outlook for employment and improving business sentiment, combined with the cost barriers to owning a home, will drive rents in prime central London up by one per cent this year. Stronger growth will also be recorded in 2013 and beyond.

03 June 2013

Tags

London Rental Property Market,Prime London Property