The amount of money it costs to rent a residential property in London fell by 0.6 per cent during the first quarter of 2012, compared to the previous three-month period. According to Cluttons, which released the figures, this represents a readjustment that will bring rental charges in line with historical trends, although the firm acknowledged the lettings market in the capital has improved markedly over the past five years. The organisation noted average annual rental growth in the city has reached 5.6 per cent in this timeframe, with demand for this type of accommodation climbing as a result of the "growing globalisation of businesses in London combined with the declining ratio of owner-occupiers to renters".
Partner for residential lettings at Cluttons Lynn Hilton commented: "The remarkable growth in rental values seen last year could not continue and this return to the trend in trajectory values is bringing the market back to a more stable level." Those holding residential property investments in London who rely on tenants for their income need not be overly concerned by the falls, though, with Ms Hilton stating: "While there is considerable economic uncertainty, we don't anticipate a drastic reduction in rents as demand is still high." Meanwhile, figures published by Knight Frank this week revealed rents in London were 1.2 per cent higher in the first quarter of this year than they were in the same period 12 months earlier, despite recording six consecutive monthly declines.
Knight Frank pointed out there has been an increase in the number of new tenant registrations and viewings at the start of this year, although the volume of rental contracts signed has fallen. According to the organisation, this indicates tenants are looking for new accommodation, but are unwilling to commit due to a lack of confidence in the jobs market. A rising number of renters are also opting to renew existing contracts, rather than move, the firm added.
- Wednesday 11 April 2012