Rents on the prime London market continue to grow but there is an overall slowdown in demand, according to estate agency W.A.Ellis, part of the JLL group.
Lucy Morton, director and head of agency at W.A.Ellis, explains the current trends on the prime London lettings market:
“Conditions in the prime central London (PCL) residential lettings market remain more buoyant than the sales market. According to Lonres data, which matches our experience, the average rent for properties let in the first quarter of the year was unchanged on the rental values achieved in the final quarter of last year, however, on an annual basis, the average rent paid has increased by 7.4%. Despite the lack of new enquiries, there was still an 8.3% increase in properties let in the first quarter compared to the same quarter last year, and there has been a significant increase in the number of properties let in the super prime market.
“Properties let in the most expensive price band (£2,000+ per week) have increased by a third year on year. All but the lowest price band (under £500 per week) registered a rise in the number of properties let. Interestingly, there has been an increase in tenant demand from would-be purchasers who are awaiting the election results, however, levels of tenant demand as a whole are falling on all but the highest quality and best presented properties, a trend we have been noting over the last few months. There is also an air of caution among tenants who are trying to achieve the best deal as they’re aware of the imbalance between supply and demand.
“JLL is the largest development sales and letting agency in London and in 2015 will see over 2,400 brand new units completing. We anticipate at least 50% of these coming to the rental market throughout the W.A.Ellis/JLL offices alone. While brand new apartments and houses are a must for some tenants, this is not everyone’s ideal and in central London particularly, the ‘second hand’ homes market is more dominant. The landlords of these properties face strong competition from the new build market and, therefore, presentation and pricing are key to getting these properties let in a timely manner. Even more so now, the quality of new bathroom and kitchen fittings is paramount; generally, we see a reduction in void periods of up to 35% where the landlord has undertaken some form of work when the tenancy ends and where considered necessary.”
