Taylor Scott International News
January will be the start of the prime property lettings season in London, kick starting a recovery in top end rents in 2016, according to a new outlook report. Throughout 2015, the pace of rent rises in London slowed, and weaker activity at the top tiers of the lettings market in particular have created a difficult climate for rent growth, says the report from estate agents Marsh & Parsons. However, the firm is predicting a rental resurgence in 2016, forecasting prime London rents to rise 5% in the next 12 months, a significant uplift from a the 1.9% rise in the past year. While rents at the highest tiers of the market, namely over £750 per week, are unlikely to experience major pick up, rental prices below this benchmark have significant room to grow. And much of this growth will come at the very start of the year, with January typically the strongest month outside of the summer for lettings activity. Over the past three years, there has been on average a 34% monthly boost in lettings exchanges from December to January, as people use the New Year for fresh starts. ‘Come January, households will be picking up where they left off on big life decisions – be this downsizing, starting a new job, relocating overseas or even separating. All of these combine to give new impetus to the rental market at the very start of the year, and it’s a time when we experience some of our most zealous lettings activity,’ said Patrick Littlemore, director of lettings at Marsh & Parsons. ‘This initial activity will feed into stronger and more sustained rent growth throughout 2016 as a whole. It is the lower price brackets of the private rented sector that have the biggest room to grow next year, especially in popular hot spots such as Queens Park, lauded for retaining the style and atmosphere of Kensington with more affordable prices,’ he added. The report also points out that the average length of a tenancy on a rental property in prime London has grown 18% in the past year, from an average of 19 months in the third quarter of 2014 to 23 months during the third quarter of 2015. Marsh & Parsons expects the popularity of two year leases to continue growing in 2016 as tenants are increasingly entering into these longer tenancies in search of greater stability in the face of reduced rental properties available on the market, but it is the guarantee of housing they are securing, not rental prices over this period. The report explains that the stock of homes to let in London has decreased significantly in 2015. The total supply of available rental properties across 2015 was 9% lower than in 2014, while the levels of demand experienced throughout the last year has been 7% higher than during 2014. As… Taylor Scott International
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