As the British market bounces back because of the London residential property market getting in better shape, rents in central London now hit a record high, reaching up 25 percent higher since their low point in June 2009 and marginally exceeding the previous peak reached in March 2008 by 0.2 percent.
According to the latest figures from Knight Frank, prime London rents rose 0.4 percent last month.
It was the latest monthly rise and it is the 20th in succession. It contributed to the London residential properties’ annual growth rate of 16.3 percent.
The rise was actually experienced by central London for a long time already as Head of Knight Frank Residential Research Liam Bailey said that the central London residential lettings market has been enjoying a quiet boom over the past 18 months.
Accordingly, the boom was caused by the high demand for accommodation from a recovering financial and business services sector and the weak supply of accommodation, leaking potential supply into the sales market as owners look to capitalize on near record prices.
A firm evidence of the ongoing strength of London’s prime rental market is the fact that rents rose by more than 25 percent since June 2009, reflecting a huge improvement since mid-2009, when the market was suffering from massive oversupply and weak tenant demand.
Aside from the growth in rents, another evidence of the growth is the fact that the volume of available rental properties has fallen considerably, by almost 18 percent in the 12 months to April this year, compared to the previous 12 months.
Since the rents are now marginally above their March 2008 peak level, the rises for it this year are expected to be within 5 percent to 10 percent.