Banking job cuts have weakened prime London lettings, says agency

Falling demand from financial services sector employees has seen the annual rental value growth in prime central London ease back to just 0.7 per cent according to Knight Frank. 

In figures released just before the Christmas break the high-end agency says rental values in prime central London fell last month by -0.4 per cent from their November levels; the 0.7 per cent annual growth figure is the lowest in PCL since July 2014.

“Demand has fallen over the last six months as a number of banks have implemented restructuring plans. European banks in particular have been slower to cut jobs than their US counterparts following the financial crisis. Profitability has fallen due to new regulations that force banks to hold more capital, which has contributed to job cuts at European banks that have been in excess of 100,000 in recent months” according to Knight Frank’s head of London residential research, Tom Bill.

He says international uncertainty over China and falling commodity prices have compounded the issues for the lettings sector.

The agency says demand at the ‘super prime’ level of £5,000-plus per week remains strong as uncertainty continues to surround taxation and price growth in the higher price brackets of the sales market - meaning more wealthy individuals are renting for the moment. 

“Equally, demand remains strong in lower price brackets among workers of all professions, bolstered by the strength of the UK’s economic recovery” says Bill.