Following a year of sustained, record-breaking growth, the London rental market is finally starting to slow.
New data shows that for the third successive quarter, rents in the capital either stayed constant or experienced only conservative growth.
Falls
Many areas of prime central London saw rents tumble, underlining a trend that has seen demand rise in the inner suburb. With wealthy overseas investors being deterred by the upcoming Brexit vote, demand for luxury homes in places like Knightsbridge and Chelsea seemed to have peaked.
With this said, experts are still predicting that a fall in the value of British Sterling will make prime central London more sought after in the coming months.
London rental market begins to slow
Inner growth
Rental growth in inner London suburbs has continued, with the market growing in confidence. Wandsworth in particular saw steady growth, as did Bayswater, Queen’s Park and Kensal Rise.
However, North London, in particular the regions of Colindale, Golders Green and Hampstead Garden Suburb saw the most substantial rental growth in the last quarter. This was to be expected, following the completion of Crossrail works that had closed the Northern Line interchange at Tottenham Court Road.
Marc von Grundherr, of Benham & Reeves Residential Lettings, noted, ‘this is a much needed pause for breath after such huge gains in rental values. Unfortunately for tenants, this pause may only be temporary.’[1]
‘With increasing restrictions on buy-to-let, more amateur landlords will be exiting the market, leading to a drop in supply in the face of a growing population. Over the long term, rents will inevitably go up,’ von Grundherr went on to warn.[1]
[1] http://www.propertyreporter.co.uk/landlords/londons-rental-market-pauses-for-breath.html