Spotlight: 

Prime Residential Rents

Prime Residential Rents
Prime residential rents

13 July 2017, by Lucian Cook

Headline rents continue to slide across prime London and the commuter belt in the face of uncertainty. But pockets of the market are bucking the trend – some as a direct result of the Brexit vote

Over the past year, prime rents across London fell by 5.4%, the most pronounced falls being in the highest value, core prime central London locations. Here, landlords have absorbed an average decrease of 9.5% in rents since the credit crunch, although this has been offset by strong capital growth over this period

 

Despite falling rents, the average corporate relocation budget has risen by 13% year on year. This has been largely driven by banks and financial institutions relocating higher-level staff, often moving with their families to live close to top schools

The prime markets within an hour of London saw marginally positive rental growth over the past three months, although annual growth remains negative. Demand continues to remain more robust for smaller properties from needs based renters relocating for work or lifestyle reasons

Landlords have had to contend with regulation and legislation changes that have curtailed investment into the residential sector. While this is likely to limit supply coming to the market, cash buyers who are not affected by mortgage regulation will underpin investment

In the mid-term, increased supply from new build and accidental landlords unable to sell is likely to suppress rental growth in London. However, London’s global city status will ultimately underpin demand. We expect to see an uptick in the number of renters moving out to the commuter zone

Articles from Spotlight: Prime Residential Rents – July 2017

Despite an overall fall in rents across prime London, the market reveals some interesting micro trends

 
 

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Key contacts

Lucian Cook

Lucian Cook

Director
Residential Research

Savills Margaret Street

+44 (0) 20 7016 3837

 

Kirsty Bennison

Kirsty Bennison

Associate
Residential Research

Savills Margaret Street

+44 (0) 207 016 3836

 

Jane Cronwright-Brown

Jane Cronwright-Brown

Head of Lettings
Residential Lettings

Savills One Church Road

+44 (0) 20 7824 9048