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Prime London rents slow down at last

Tuesday, 22 November 2011 9:40 AM

Rents in the most expensive parts of Central London have fallen for the first time since June 2009, according to Knight Frank.

The property consultancy says the 0.1 per cent fall in Prime London residential rents did not herald a downturn in the market but a moderation in the growth that has seen rents rise 27 per cent in just two years.

That leaves Prime London rents still two per cent above their previous peak before the collapse of Lehman Brothers in March 2008.

One reason for the slowdown could be an increase in stock volume, with annual growth in new instructions running at 36 per cent.

However, demand for accommodation is still rising, with new tenant registrations up 15 per cent and viewings up 31 per cent.

Liam Bailey, head of residential research at Knight Frank, said: "We do not believe that we are about to experience a sharp reversal in rents.

"We stand by our forecast that 2012 will see positive rental growth, although this will be likely to be capped at four per cent/five per cent, close to annual earnings growth, which we believe is a realistic and sustainable forecast for the medium to long term for the prime London rental sector."

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