As the supply of lettings properties across London falls, so rents are being pushed higher according to Knight Frank.
Average rents in prime outer London (POL) increased 3% in the year to September.
That included a 2.3% rise over the last six months, which is the fastest pace of growth over a half-year period since January 2024, a time when the lettings market was recovering from the supply/demand imbalance caused by the pandemic.
The agency says landlords have been setting asking rents higher to reflect the increased risks they face under the new Renters Rights Act (RRA) rules since May, which Knight Frank calls “an unintended but predictable consequence.”
Meanwhile, the number of new listings in POL fell 6.4% in the year to August compared with the previous 12 months.
It was a similar story in prime central London, even though supply has been less of a constraint.
Due to the current weakness in the PCL sales market, more discretionary owners have let out their property.
Average rental values in PCL increased 1.3% in the year to September.
However, after falling at the start of the 12-month period, they have risen by 1.8% over the last six months, which is also the fastest pace over a half-year period since January 2024.
Underlining the imbalance between supply and demand, the ratio of new prospective tenants to new properties in POL was 8.9 in the three months to September.
That was higher than during the pandemic when demand snapped back quickly after successive lockdowns. In PCL, the figure was 5.6, which was the highest in four years.
This article is taken from Landlord Today