The result of the EU referendum has created a mixed rental market in the capital, according to a new report by letting agent Benham & Reeves Residential Lettings.
Rents were up by in excess of 4% in Chelsea, however in nearby South Kensington, rents were down by around the same figure. Similarly contradictory results were evident across the capital in the second quarter of the year.
Brexit uncertainty
In the earlier part of this year, uncertainty over the result of the EU referendum was having an impact on the prime central London rental market. Rents in the capital were falling, frustrating landlords suffering from reduced capital growth.
With rental value growth seen in outer London suburbs until recently, the report indicates that even these locations have now seen a peak. Rents in these areas have either plateaued or have risen only marginally.
The lack of any definable trends is certainly noticeable. For example, Hampstead Garden Suburb enjoyed rental growth of over 4.5% but nearby North Finchley saw rents tumble by over 10%. The eastern part of London has seen double-digit growth, thanks largely to high-value developments in the region. However, the Western part of London has seen rents slide by more than 4%.
Brexit has caused a mixed London rental market
Volatility
Marc von Grundherr, of Benham & Reeves Lettings, said, ‘there is nothing the property market hates more than uncertainty. While the referendum result may not have been what many London residents wanted, it has provided us with an answer. Our Q2 results are a reflection of what was happening in the market in the run up to the vote.’[1]
Continuing, he noted that, ‘if anything, the referendum result could be just what the market needed. The rental market always benefits in financially volatile times as people would rather rent than commit to buying a property. Demand is still strong and since the referendum, we are receiving an average of 17 applicants per property compared to the 13.9 at this time last year. Notably, many of the applicants have been from the EU.’[1]
[1] http://www.propertyreporter.co.uk/landlords/has-brexit-caused-a-mixed-rental-market.html