Primelocation.com Prime Index – September 2008
Primelocation.com has just released the September Prime Property Index on London and UK-wide sales values and London lettings.
Here’s what the index shows about the prime London Lettings:
1. Weekly rental values have dropped for the 6th successive month by 1.16% whilst stock continues to remain empty. Landlords must continue to offer reduced rates in order to entice prospective tenants.
2. Only Central and South West London has seen positive growth, with weekly rents being hardest hit in all other areas of London as stock continues to flood the London rental market.
- Kentish Town NW5 has seen rents rise by 4% and Bloomsbury WC1, Clerkenwell EC1 and City have too by 4.6%. Highgate N6, which is just up the road from Kentish Town, has seen rental values decrease by 4% since August.
- West London rents were hardest hit – falling 2.51% as stock continues to flow onto the prime London rental market. Kensington W8 has also had a bad month with values down 3.6% and so too has Putney SW15 and East Sheen SW14, down 4.6%.
3. Annualised price changes continue to fall and are now at their lowest since January 2005, with weekly rents 2.28% lower than September 2007.
Andrew Smith, Primelocation.com’s Head of Insight comments:
“The current turmoil in the market is affecting all property owners, including those in prime London locations and, unlike the mainstream market where stock is falling to record lows, we have seen an increasing amount of prime stock come onto the market for both sales and lettings in the past few months. The increase in stock for sale has been caused by wealthy investors offloading stock as well as home owners who have been forced to re-evaluating their finances following steep rises in mortgage rates.”
In London, there has already been a number of widely reported job cuts from companies struggling to cope with the turmoil in the financial markets including Lehman Brothers, Merrill Lynch, Citigroup and HSBC. These job losses are expected to have an especially severe impact on the corporate rental market, which had been one of the few property sectors performing well this year. Rental agents Savills say 64 per cent of its corporate tenants in London work in the financial services industry, a proportion mirrored in most top-end lettings agencies. Large-scale job losses will result in the termination of tenancies on hundreds of top-end apartments and houses in many prime London areas.
Andrew continues, “Many would-be vendors who have been unable to sell their property for the desired price are deciding to let it out. This comes at a time when many of the people who would have previously snapped this type of property up, namely high earners working in the financial sector, are facing their own uncertainties. At the prime end of the rental market, the combination of increased stock levels and fewer companies able or willing to spend money on expensive corporate lets is likely to mean that landlords will be faced with the choice of either accepting a lower rent or suffering longer void periods. We expect this trend to continue until the financial markets find some stability.”
For further information on the Primelocation.com Prime Index go to www.primelocation.com.
