The property letting market is set for a strong January on the back of post-Christmas divorces and fresh New Year starts, according to estate agent Marsh & Parsons.
Its research predicts that January will be the strongest month outside of the summer period for lettings activity as people seek new rental accommodation due to divorces and separations after the Christmas holidays.
This will kickstart a rental resurgence following a period of weaker activity at the top end of the lettings market which has slowed growth. Over the past three years there has been an average 34% monthly boost in lettings exchanges from December to January as people use the New Year for fresh starts.
Patrick Littlemore, director of lettings at Marsh & Parsons, said: “Come January, households will be picking up where they left off on big life decisions – be this downsizing, starting a new job, relocating overseas or even separating and moving out of the marital home.
“As tenant demand mushrooms in January, this initial activity will feed into stronger and more sustained rent growth throughout 2016 as a whole.”
Marsh & Parsons predicts prime London rents will rise 5% in the next 12 months, a significant uplift from the 1.9% growth in the past year.
While rents at the highest end of the market are unlikely to experience a major pick up, properties below this will see the largest rise.
Tenants will also more likely opt for tenancy agreements of longer than a year in 2016 as they seek increased security amid an ever more competitive and charged lettings market.
Littlemore said: “Two-year tenancy agreements have picked up traction over the past year and this momentum will continue to build through 2016. But with around half of such fixed term agreements containing some sort of rent increase, it’s not savings that’s driving their popularity, it’s stability. At a time when housing stock is in serious short supply, tenants are seeking out two-year contracts to give them peace of mind, and to put off the stress of searching for a new rental property.”
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