The future is looking brighter for landlords of property in prime central London, according to Knight Frank. In the latest Prime Central London Rental Index, the experts explained that while rents will be ending the year in decline, as demand increases in 2014 and the economy improves, growth will occur once again.
Tom Bill, associate for rental research at Knight Frank, said: "Demand for rented accommodation in London is certainly on the rise. The number of new lettings in the year is up 18 per cent on the previous 12 months, while new viewings and applicants were up by eight per cent and nine per cent, respectively."
However, in November rents fell by 0.3 per cent overall - the 18th month that luxury rents have been in decline or flat. For 2013, rents have now fallen a total of two per cent. Nevertheless, there were some areas of growth and Hyde Park enjoyed a 0.4 per cent increase and Marylebone has experienced a 2.2 per cent jump in the year to date.
Mr Bill noted that with London's prime rental market linked to the health of financial sector, it isn't surprising rents have gone down this year. The financial service industry is still feeling the effects of layoffs in 2010 and 2011. Now the economy is growing and stability improves, however, things look set to change. Knight Frank expects rents to rise by two per cent in prime central London next year on the back of job creation and economic optimism.
"The employment outlook in London continues to improve against a background of growth forecasts that many economists are revising upwards, including the Confederation of British Industry earlier this month," Mr Bill said. Consequently, prime central London rents are expected to outperform other markets over the medium term, increasing 18 per cent between 2014 and 2018 versus 16 per cent in the UK overall and 17 per cent in prime outer London.
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- Tuesday 17 December 2013