Rents in prime central London fell by 0.7% during the third quarter of 2013, taking the decline in rents so far this year to 1.2%.
The fall in rents during September, at 0.1%, was the most modest since May 2013, and points to a moderation in the recent trend
of rental falls.
We have noted in previous months the close relationship between conditions in the prime central London rental market and the health of the financial and business services sector.
According to Markit Economics Report on Jobs, compiled on behalf of the Recruitment & Employment Confederation and KPMG, the number of staff placed into permanent positions by London-based recruitment consultancies rose for the third straight month in August.
As firms in London begin hiring and business expansion begins to spread, so too demand for rental accommodation rises.
The number of new applicants registering their interest in renting a home in prime central London was 9.9% higher between January and September 2013 compared to
the same period in 2012; and the volume of property viewings by prospective tenants has risen by 11.9%.
As a result of this increase in market activity there has been a notable rise in the number of tenancies agreed so far this year. The number of tenancies agreed in prime central London is 16.1% higher over the year-to-date compared to the same period of 2012.
The majority of these deals have been for homes in the sub-£1,000 per week rental bracket, which has accounted for 70% of all new prime lets over the year-to-date. Flats in this price bracket are proving particularly popular with young professionals and couples, agents report.
Assessing rental movements by price band we can confirm that the £500-£1,500 per week price bracket saw a 0.3% decline in September compared to the previous month, and a decline of 1.6% over the year-to-date.
In comparison properties in the £1,500+ per week bracket have fallen by 0.9% in 2013. While the headline figure indicates that rents in prime central London are declining, performance is varied across markets. In Mayfair, Notting Hill and Hyde Park rents have declined by 5.2%, 2.4% and 1.9% over the year-to-date. Rents in the City and in Kensington, however, are unchanged in 2013 and in Marylebone rents have risen by 2.2% so far in 2013.
