Rental values in central London rose again during the first quarter of this year, a new report shows.
According to Cluttons, rents in central London rose by an average of 1.7 per cent in the first quarter of this year to reach £1,016 per week. Although this figure remains broadly unchanged from this time last year, Cluttons does report that the volume of applicants with higher budgets is in decline, a trend which is expected to persist over the coming months.
With rental values in central London now at a record high, on the back of greater competition for properties to rent in central London, a growing number of tenants are reportedly being drawn to peripheries of prime central London in zones 2 and 3.
Sue Foxley, head of research at Cluttons, said: “A growing number of tenants to look further afield for cheaper accommodation. As a result we are seeing migration out to the periphery of prime central London , to zones 2 and 3, where rents are significantly lower than the prime core.”
With more tenants now spreading their wings to focus on lower priced properties in zones 2 and 3, as they seek to minimise outgoings, particularly as stubborn inflation continues to erode real incomes, demand for properties to rent in north west London is rising.
St John’s Wood, Primrose Hill and Maida Vale are just some of the areas attracting a greater level of interest from renters, helping to push rental values in these areas higher in the process. This in turn is driving higher demand among investors for buy-to-let properties in these regions, reducing the volume of properties for sale in St John's Wood, Primrose Hill and Maida Vale in the process, according to leading estate agents Sandfords.
Andrew Ellinas, Director at Sandfords, commented: “The success of the prime central London property market over the last five years is creating a wave of price rises in nearby areas as people move further afield in search of value. Areas such as St John's Wood, Primrose Hill and Maida Vale, traditionally regarded as outside the prime central London zone, are now developing into an 'outer prime London' market.”
The recent rise in the volume of people looking to rent property outside of central London, means that more landlords in the heart of the capital are now becoming more flexible with their rents in order to lure tenants back into prime central London areas.
Competition to attract tenants has not been helped by a 12 per cent rise in housing supply in central London over the past year, according to Chesterton Humberts.
The company’s latest Prime London Lettings Report shows that buy-to-let continues to grow and now accounts for 13 per cent of all UK mortgages. But the figures also reveal that tenant demand in central London has softened due to a reduction in corporate relocation budgets, financial services redundancies and increased mortgage availability, placing downward pressure on rental values in the process.
Some landlords in central London have reportedly responded to recent trends by offering to freeze rents for tenants and sometimes even reduce them altogether.
Nick Barnes, Head of Research at Chesterton Humberts, commented: “The prime residential lettings market remains active, however with buy-to-let landlords bringing more stock onto the market, tenants now have a wider choice and consequently greater bargaining power. This is forcing landlords to be more flexible in order to attract and retain tenants, which is often resulting in downwards pressure on rents.”
Despite greater flexibility among some landlords in central London, as far as rents are concerned, some letting experts expect to see rental demand for homes in popular north west London areas continue to grow.
Adam Feather of north London based estate agents Robert Anthony said: “Although central London remains the most popular place to live in the capital, rents remain extremely high, and so it is easy to see why more people should want to rent a home in north west London instead.”
With rental values in north west London a fraction of those being commanded in prime central London, not many people would disagree with Mr Feather.
According to Cluttons, rents in central London rose by an average of 1.7 per cent in the first quarter of this year to reach £1,016 per week. Although this figure remains broadly unchanged from this time last year, Cluttons does report that the volume of applicants with higher budgets is in decline, a trend which is expected to persist over the coming months.
With rental values in central London now at a record high, on the back of greater competition for properties to rent in central London, a growing number of tenants are reportedly being drawn to peripheries of prime central London in zones 2 and 3.
Sue Foxley, head of research at Cluttons, said: “A growing number of tenants to look further afield for cheaper accommodation. As a result we are seeing migration out to the periphery of prime central London , to zones 2 and 3, where rents are significantly lower than the prime core.”
With more tenants now spreading their wings to focus on lower priced properties in zones 2 and 3, as they seek to minimise outgoings, particularly as stubborn inflation continues to erode real incomes, demand for properties to rent in north west London is rising.
St John’s Wood, Primrose Hill and Maida Vale are just some of the areas attracting a greater level of interest from renters, helping to push rental values in these areas higher in the process. This in turn is driving higher demand among investors for buy-to-let properties in these regions, reducing the volume of properties for sale in St John's Wood, Primrose Hill and Maida Vale in the process, according to leading estate agents Sandfords.
Andrew Ellinas, Director at Sandfords, commented: “The success of the prime central London property market over the last five years is creating a wave of price rises in nearby areas as people move further afield in search of value. Areas such as St John's Wood, Primrose Hill and Maida Vale, traditionally regarded as outside the prime central London zone, are now developing into an 'outer prime London' market.”
The recent rise in the volume of people looking to rent property outside of central London, means that more landlords in the heart of the capital are now becoming more flexible with their rents in order to lure tenants back into prime central London areas.
Competition to attract tenants has not been helped by a 12 per cent rise in housing supply in central London over the past year, according to Chesterton Humberts.
The company’s latest Prime London Lettings Report shows that buy-to-let continues to grow and now accounts for 13 per cent of all UK mortgages. But the figures also reveal that tenant demand in central London has softened due to a reduction in corporate relocation budgets, financial services redundancies and increased mortgage availability, placing downward pressure on rental values in the process.
Some landlords in central London have reportedly responded to recent trends by offering to freeze rents for tenants and sometimes even reduce them altogether.
Nick Barnes, Head of Research at Chesterton Humberts, commented: “The prime residential lettings market remains active, however with buy-to-let landlords bringing more stock onto the market, tenants now have a wider choice and consequently greater bargaining power. This is forcing landlords to be more flexible in order to attract and retain tenants, which is often resulting in downwards pressure on rents.”
Despite greater flexibility among some landlords in central London, as far as rents are concerned, some letting experts expect to see rental demand for homes in popular north west London areas continue to grow.
Adam Feather of north London based estate agents Robert Anthony said: “Although central London remains the most popular place to live in the capital, rents remain extremely high, and so it is easy to see why more people should want to rent a home in north west London instead.”
With rental values in north west London a fraction of those being commanded in prime central London, not many people would disagree with Mr Feather.
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