London rents begin to fall
Newlands Quay, Wapping, London
Tuesday, 19, Aug 2008 03:45
The cost of rental property in London has begun to fall, as a glut of new property swamps the market according to new research.
Exclusive areas, such as South Kensington, Chelsea and Knightsbridge, have seen the supply of property double over the last year, according to Cluttons.
As a result asking prices for rental property have fallen by around five per cent in some areas, finds the estate agents.
Furthermore, tenants are becoming more demanding as the market swings in their favour and landlords are now less likely to receive the uplift in rents at renewal that they might previously have achieved.
In response landlords should consider making improvements to their property or offering added extras such as cleaners or gardeners to make their property more appealing, argues Cluttons.
"The struggling sales market has fuelled a mini boom in lettings, but we are now starting to see rents dip across the board, as the number of new tenants coming to the market levels off," said Amelia Greene, partner for lettings at Cluttons' south Kensington office.
"To prosper in the current conditions, landlords must have realistic expectations regarding rental income and steer clear of void periods at all costs.
"A number of 'accidental landlords' who have come to the market reluctantly after failing to sell their property, are refusing to budge at all on the asking rent, instead settling for void periods which professional landlords know are seriously detrimental to yields."
This trend is also being recorded nationwide.
The news follows research released earlier today by the Royal Institution of Chartered Surveyors (Rics), which finds a slump in the property market has forced more would-be sellers to rent out property in the interim.
As prices continue to fall an increasing number of vendors are likely to wait on the sidelines for the market to hit bottom, before venturing to sell their property.
Chris O'Toole