Rents have finally begun to slow slightly in London, following two quarters of sustained growth. However, experts have forecasted that this fall could only be a temporary one.
Capital rents
Many parts of central London saw rents stay fairly constant, or experience increases of less than two percent. These statistics marry with market conditions across the majority of east and south London, which also experienced rental growth slips after a prolonged period of growth.
One notable exception is the Covent Garden area of the city, where rental growth is rising as the area becomes a more established residential location. Another is the up and coming trendier area of Hackney, where young professionals are continuing to relocate.
On the other hand, parts of north London saw price falls similar to those in the previous quarter. Issues on the Northern Line and the closure of the interchange at Tottenham Court Road have moved to deter many potential commuters.
London rent growth stalls in final quarter of 2015
Future falls?
‘Successive budget announcements have seen many landlords’ tax advantages disappear while regulations increase,’ said Marc von Grundherr, Lettings Director of Benham & Reeves Residential Lettings. ‘With stamp duty attracting an extra three percent from April, we anticipate supply will fall as amateur landlords exit the market or seek out other asset classes.’[1]
‘When supply falls, rents will invariably go up. This will be the last chance for many tenants to move into a nice apartment while rents are plateauing and there is a choice of properties. Once Osborne’s measures really start to be felt, the market will change,’ von Grundherr went on to forecast.[1]
[1] http://www.propertyreporter.co.uk/landlords/rents-plateau-after-two-quarters-of-growth.html