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Prime rents across the English Home Counties, locations that are popular with people who commute to work in London, fell by 0.6% between April and June, according to the latest index. The Knight Frank rental index also shows that on an annual basis rents were 0.8% lower than a year previously and adds that the fall in quarterly and annual rental growth has been driven by higher stock levels and a desire from landlords to remain competitive and keep void periods to a minimum in what is increasingly a tenant’s market. However, the index report points out that underlying demand for rental property remains strong, with the number of new prospective tenants registering in the second quarter some 6% higher than the same period in 2015 and the number of viewings up by 12% year on year. The data also shows that the number of new tenancies agreed between April and June was almost identical to the same period in 2015 and 28% higher than in 2014. However, despite robust activity levels, agents note that any upwards pressure on rents has been countered by rising stock, especially at the top end of the market. ‘In the wake of the European Union referendum, there is already anecdotal evidence that some vendors are deciding to let their property until more clarity emerges, and this could further weigh on rental values in the medium term,’ said Knight Frank associate Oliver Knight. The index reveals that the market continued to attract international tenants in the second quarter. Indeed, some 38% of new renters across the prime Home Counties market were non-UK nationals between April and June in Ascot, Cobham and Esher, where corporate tenancies tend to be more prevalent this rose to 47%, although some of these tenants will already be domiciled in the UK. Individuals from North America were the most active movers during this time, with the start of the American school term in August likely to have been a factor, the report explains. Corporate enquiries were more than double the level in June and 19% higher than in February, the second busiest month of the year to date. Executives being relocated by their companies for work, both from London and internationally, have historically formed a large part of demand within the Home Counties lettings market. ‘As such, any rise in economic and business uncertainty as a result of the vote to leave the EU has the potential to weigh on demand for rental property as companies take stock of the new environment or look to make budget cuts,’ Oliver explained. ‘However, while our figures show a notable slowdown in the number of enquiries from relocation agents in the immediate run-up to the referendum, the number of enquiries in July was at the highest level all year, suggesting a degree of pent-up demand in spite of the UK’s vote to leave the EU,’ he added. The report also points out that the prime rental market in… Continue reading →