The decline in rents that we have seen since the middle of last year appears to be ending, declares Knight Frank in their latest residential market review. It will take some time for the level of rental stock to return to normal levels but a lot of ‘forced’ landlords have begun to slowly shift properties back into the sales market.

- The fall in central London rents continued into the early summer – Knight Frank’s prime London rental index confirms that for the three month period to the end of June 2009 rents fell by 1.9% on average. On an annual basis in June rents were 19.3% lower than they were in 2008.

- It has been more expensive properties that have borne the brunt of the rental falls – with rents on properties costing up to £500 per week falling only 11.3% over the year to June,
and those costing over £1,500 per week falling by 27.3% over the same period.

- Most central London sub-markets have been hit by falling rents. Chelsea and Kensington have been particularly affected with declines of over 26% in each area. Only the City – with a rental fall of just 9.7% over the past year – has been partially protected from the downturn. The City benefits from a high proportion of lower priced properties which have been better performers during the downturn.

- The autumn market is likely to be characterised by hard negotiations for landlords – but significant rental reductions from here are unlikely. The traditional busy September market could see the beginning of rental increases in some areas – as demand from new employees and their families comes into the market.

Click here to download the latest research from Knight Frank.

This entry was posted on Friday, September 25th, 2009 at 2:08 pm and is filed under Statistics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.