Recent data from ARLA have shown some interesting changes in London’s property market. Rent increases in the capital have slowed down in recent months. Nationally, 25% of agents have reported rent increase, whilst in London just 8% reported the same. Conversely, 25% of London agents reported rent decreases in the last month compared to the national average of 10%.
Rental Market: Supply and Demand
In January, the number of properties managed by lettings agency per branch increased to a high of 193. This figure decreased to 183 per branch last month. Nationally, the number of properties managed per branch last month decreased by 5%.
However, there are indications that supply is rising overall, as the above amount is a 4% increase from February 2016.
34 prospective tenants were registered per branch in February this year. This number is the same as January, but part of a downward trend, with 37 registered in February 2016 and 40 in 2015 .
Here is what David Cox, ARLA Propertymark Chief Executive, had to say:
“The fact that rent prices in London are bucking the national trend is a positive sign for renters in the Capital…
While London’s results indicate a step in the right direction, it must be taken with a pinch of salt. The imminent withdrawal of mortgage interest relief and the Government’s decision to ban letting agent fees will more than likely have the opposite effect on rental costs across the country …. The cost of services provided by letting agents will inevitably be passed onto renters through increased rent.
What does all this mean for the average London Landlord?
At the moment, there is some over-supply in the market which is causing this pressure on prices. However, we do expect the supply to contract somewhat in the near future to ease the pressure to a more comfortable rate for landlords. Hold tight! The summer always brings plenty more renters onto the market and we should be seeing a more positive outlook in the next few months.