The new FindaProperty.com Rental Index for May 2009 was published last week.

Key points from the London market overview:

ASKING RENTS

- Asking rents increased in 23 of the 33 London Boroughs, suggesting that the London market is beginning to show some early signs of recovery.

- Overall the London market saw a month-on-month rise in asking rents of 0.4%, from £1,623 pcm in April 2009 to £1,630 pcm in May 2009. In addition, of the 10 boroughs that showed month-on-month falls in asking rents, all of the declines were modest with the largest fall being in the City of London, where rents fell by only 1.3%.

- Despite the recent growth in rental prices, the London market is still far from making a full recovery. Overall, rental prices have fallen by an average of 6.6% year-on-year between May 2008 and May 2009, with only the three boroughs of Barking & Dagenham, Hillingdon and Greenwich showing positive annual growth.

London Boroughs Overview, excerpt from Findaproperty.com May 2009 Rental Index Report.

RENTAL YIELD

- The average rental yield across the Capital stands at 4.74%; however, investors are continuing to receive better returns in London’s outer boroughs, especially in areas which are undergoing extensive regeneration. Average yields in excess of 6% can be found in Barking & Dagenham (6.44%) and Newham (6.52%), two areas which have seen some of the largest yield growth over the past year, with rates of return rising by 1.11 percentage points and 0.34 percentage points respectively.

- It continues to be the prime areas of central London such as Kensington & Chelsea and Westminster as well as affluent areas of south west London, including Richmond-upon-Thames and Wandsworth, which have the lowest rental yields. Kensington & Chelsea has the only sub 4% average yield in London at 3.92%, followed closely by the City of Westminster with a yield of only 4.12%. In addition, rental yields in some prime areas are falling with Westminster recording a 0.72 percentage point fall in the yield over the past twelve months.

Download the full report here > FindaProperty.com Rental Index May 2009

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