The latest Knight Frank’s research London Residential Review takes a look at the residential lettings market:
- Rents in the II quarter of 2007 increased by 4.2% (annual increase of 12.2%);
- Kensington experienced the highest rental growth of 6,3%;
- Most wanted are one and two bedroom flats and larger family houses throughout prime London locations;
- The corporate sector continues to thrive and now accounts for 40% of London lettings. 375 of the world’s top 500 companies are located in London and 287 foreign banks have offices within the City;
- Large number of potential buyers have been priced out of the market. They are now waiting in the rental sector, building deposits ready for an eventual move into the owner-occupier sector;
- Investors continue to put money in the residential investment market. Five base rate increases since August 2006 means that net rental income will often not over finance costs;
- According to the Council of Mortgage Lenders, the buy to let sector accounted for 12% of new mortgage loans in the first half of 2007;
- The rents are only 1% higher than their mid 2001 peak;
- Gross investment yield rate hit 4.01% in June 2007, down from 4.62% 12 months earlier;

THE FORECAST - Rents will end 2007 14% higher than they started the year. Rental growth in central London in 2008 will outpace growth in capital prices and will total 12% for the year.

This is a picture of a former Honor Oaks Baptist church. The Manhattan Loft Corporation is turning it into a residential development of 14 apartments. No doubt the apartments will be great – the high ceilings, the extraordinary architectural details. I wonder how one would feel about spending the nights alone though. That could be quite intimidating, knowing the history that surrounds you! What do you say, would you live in a church?