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London renters could see 10% rent increase in 2011

Wednesday, 8 June 2011 12:13 PM

Rents in Central London could rise by between eight and ten per cent this year, Cluttons reported today.

In the estate agent’s June residential forecast, it was pointed out that job insecurity and static or decreasing incomes were creating a “mortgage famine” and low consumer confidence, meaning the demand for rental homes is growing.

The report points out that tenants living in Central London already had to adjust their finances to accommodate the record rent increase of 19.1 per cent in 2010. Lower-budget properties (those costing £250-£650 per week) are facing particular upward pressure on their rental values due to the imbalance of supply and demand.

At the same time, however, the report found that existing tenants who wish to renew their rental contracts are facing comparatively small increases of an average four per cent. Cluttons said that this is due to landlords being eager to retain reliable tenants and avoid a void period while the economic outlook remains uncertain.

Lynn Hilton, partner for residential lettings, said: “The central London lettings market is maintaining momentum during 2011, with rents forecast to grow well ahead of trend, albeit down on the record rental growth seen in 2010.

“Tenants are really feeling the pinch and are being forced to widen their search areas to secondary locations and beyond.

"We expect this pace of growth to slow in 2012, although it will remain well ahead of inflation."

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