Taylor Scott International News
Activity in the prime central London (PCL) lettings market has been subdued during the second quarter of 2016, according to the latest analysis report. The sector saw a reduction in demand and as a result a higher number of properties on the market, says the report from real estate from JLL. As a result prospective tenants have ample choice and this has led to falls in rental values in some price ranges, particularly where properties are not presented to the highest standard. The excess of supply has led to pressure on rents across Prime Central London. However, immaculate properties presented in first class condition are not dropping in value and while the lower end of the market had previously been relatively immune, rental values fell in the second quarter. On average rental values declined by 1.9% during the second quarter of the year and over the 12 months values fell by 4.3% with declines of 8% to 10% per annum across higher rent levels. Rental market activity has remained stable with the number of transactions in the 12 months to the first quarter of 2016 down by only 1% compared with the same period in 2015. But activity picked up slightly quarter on quarter in the second quarter of 2016 with the volume of transactions increasing by 12% during this period to a similar level with the second quarter of 2015, with apartment lettings down by 1% but house rentals up by 8%. The main feature of the current market is an oversupply of stock, according to Neil Chegwidden, residential research director at JLL. ‘With weakened tenant demand, the increased supply of properties on the market is not being eroded. Available supply has also been boosted by owners electing to rent out their properties as opposed to selling them, given the diminished demand in the sales market,’ he said. ‘Sources of new demand have been limited in 2016 and this has left existing tenants in a strong bargaining position. Although most are choosing to remain in their current accommodation due to the upheaval and cost of a move, some are moving elsewhere to take advantage of these conditions,’ he added. According to Lucy Morton, director, residential agency at JLL based in Knightsbridge, the outlook for the third quarter of the year is much more optimistic. ‘Whilst the first six months of 2016 were challenging for the prime central London lettings market, the third quarter is more active,’ she said. ‘Along with an increase in transactions we expect the current oversupply of available properties to diminish as demand increases. We are seeing and letting to an influx of high net worth students and families eager to get settled before the start of the next school year. There is a marked increase in enquiries from relocation agents acting for the City corporations relocating expats into London,’ she added. Taylor Scott International
Taylor Scott International, Taylor Scott
