The London lettings market is starting to wobble due to a potential Brexit and global economic concern, says the London Central Portfolio’s most recent report.
The report shows that in the current quarter, lets have gained a mere 0.3% rental increase, with re-lets having been the worst affected, as shown by the 1.2% decline in rentals this quarter
This fall may have been due to the rising stock on the lettings market, which has increased by 26.7% in the last quarter, as reported by Lonres.
Conversely, existing tenant renewals have gone against these statistics as rental increased averaged 3.3% during the previous quarter.
However, demands from tenants are still strong in the one and two bedroom property market as void periods have fallen to 23 days.
Mayfair, Fitzrovia and Marylebone have shown the best results with a rise of 10.6% rent on average for a one bed flat, while for two bed flats the average increase is 12.8% over the last six month period.
On the flip side, Earl’s Court and Chelsea have seen the biggest drop in rents, with an average drop of 9.7% for one bedroom flats and for two bedroom flats a drop of 14.4%.
Often, the lettings sector is seen as a dependable gauge of general market thoughts because of the high turnover of properties and the ability of applicants to swiftly react to developing economic conditions.
The LCP’s latest research shows that the ongoing economic uncertainty has resulted in the slowing down of the rental market.
The market has started to subdue, despite consistently strong rental performance (a 5.5% average increase) during the course of the previous five quarters.
The analysis also shows re-lets are painting a negative picture, as shown by a 1.2% decrease in rents during the last quarter, after a rather stagnant state of affairs over the last year.