Rents and house prices in London grew in the third quarter of this year, according to the latest data from Savills. However, the firm noted that capital values jumped more than rents, rising by 1.1 per cent in the three months to September, while monthly charges only increased by 0.4 per cent in the same period. Both figures represent a slowdown in the market though, with neither matching the growth experienced in the second quarter of the year.
Yolande Barnes, director of Savills residential research, explained that the rental market in the city is "still favouring landlords". She added: "But the fact that house prices have outpaced rental growth means yields remain suppressed, so the advantage is good occupancy levels rather than income growth." Meanwhile, head of lettings at the firm Jane Ingram noted that the influx of international students at the start of the new academic year has boosted the market for flats, while the family home sector has contracted, with an increasing number of people opting to downsize from four-bed to three-bed properties.
The performance of residential real estate in London is in contrast with the rest of the country, with the most recent HomeLet survey revealing that, as a whole, average rents dropped in September compared to August. The only regions - apart from the capital - where growth was recorded on a monthly basis were Scotland, Northern Ireland and the south-west of England.
- Wednesday 19 October 2011