It's a well-known fact that the improving economy and the subsequent rising business sentiment has pushed the price of commercial property in London much higher over the last year - rents for offices, for example, are expected to hit all-time highs by 2018. However, it has also had a knock-on effect on the residential sector, according to the latest findings published by Rents for London, in which it said that the rental prices investors are able to charge for prime central London stock has risen considerably.
This has taken place as a result of the rising number of companies looking to employ more people, with professionals in some of the most lucrative sectors now looking to find themselves the ideal homes in the centre of the city. Rents for London's report said bankers and workers in the likes of the insurance, finance and mining sectors are looking for homes on a far larger scale than in recent times. "More senior executives from industries like banking, insurance, shipping and mining are searching for rented property than last year and relocation agents are increasingly prevalent in the central London lettings market as more employees move to the capital from overseas," said Tom Bill, Knight Frank residential research associate.
Of the reasons behind this, he added: "Meanwhile, the UK passed more economic milestones in January, including the announcement that its economy grew by 1.9 per cent in 2013, the fastest rate since the financial crisis. Furthermore, permanent job vacancies in London grew by the fastest rate since January 2001, according to the December Markit Economics Report on Jobs."
In the past year, the number of tenancies being taken up in the prime central London sector jumped by 19 per cent, which was the main reason for the first monthly rental increase therein for the past 21 months. They declined by two per cent in January compared to the same month last year, which was the lowest annual decline since August 2012, but also climbed by 0.2 per cent compared to December 2013.
Can property investment value still be found in London? See here for the top 10 areas around the City still ripe for investment.
- Thursday 13 February 2014